European Stocks Decline as Energy Drop Outweighs Credit SuisseAlan Soughley and Sofia Horta e Costa
European stocks fell for a third day as a decline in energy shares outweighed better-than-expected results from Credit Suisse Group AG and Unilever.
Oil-and-gas stocks contributed the most to the Stoxx Europe 600 Index’s drop, with BP Plc retreating 1.4 percent. Credit Suisse rose 6.2 percent after quarterly profit beat estimates. Unilever climbed 1.6 percent after the maker of Magnum ice cream reported higher-than-forecast sales growth.
The Stoxx 600 slid 0.5 percent to 398.1 at the close of trading, after earlier rising as much as 0.6 percent. The volume of shares changing hands was 18 percent lower than the 30-day average. Shares had advanced to within 2 percent of their record in a nine-day rally through Monday.
“We expect good profit growth in Europe, so there shouldn’t really be a massive rally on the back of a strong earnings season,” said Ben Kumar, who helps oversee about $14 billion at Seven Investment Management in London. “This earnings season is confirming people’s positive outlook on Europe and showing that the markets were right to look through Greece to the underlying fundamentals. It’s nothing more than that so far.”
The earnings season is picking up pace in Europe, with more than 200 Stoxx 600 companies scheduled to report through the rest of the month.
Aberdeen Asset Management Plc slid 7.6 percent after posting 9.9 billion pounds ($15.5 billion) of net outflows in the three months to June as investor sentiment toward Asia and emerging markets soured.
Among energy companies, Royal Dutch Shell Plc lost 1.5 percent and Tullow Oil Plc slipped 3.7 percent, as oil approached a bear market.
“It’s been such a difficult period for oil-related investments that I believe some investors are throwing in the towel, especially now that apparently the Iran agreements should allow Iran to sell more oil on international markets,” said Pierre Mouton, who helps manage $8.3 billion at Notz, Stucki & Cie. in Geneva. “But there’s a limit to that and I see relative value today in major oil companies.”
Switzerland’s benchmark SMI Index jumped 1 percent, for the best performance among western-European markets. Roche Holding AG rose 1.6 percent after the world’s biggest maker of cancer drugs reported first-half earnings that exceeded analyst estimates. ABB Ltd. advanced 1.7 percent after also posting better-than-expected profit.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.