European Stocks Are Little Changed as ARM Climbs, Miners Decline

  • ARM, Reckitt Benckiser advance after results beat forecasts
  • Credit Suisse falls after announcing plan to raise capital

European stocks fluctuated throughout the day, before closing little changed, as investors oscillated between concern about global growth and optimism regarding corporate earnings.

Anglo American Plc and Glencore Plc led resource-related companies lower, erasing an earlier advance, amid slumping commodity prices. ARM pushed a gauge of technology shares to the biggest gain on the Stoxx Europe 600 Index, jumping 6.5 percent after third-quarter revenue beat analyst estimates. Reckitt Benckiser climbed 2.5 percent after raising its full-year growth target. Credit Suisse Group AG lost 3.6 percent after saying it will raise fresh capital and reorganize its operational focus.

The Stoxx 600 lost less than 0.1 percent to 362.64 at the close of trading, after earlier rising 0.4 percent and falling as much as 0.8 percent. The swings followed investor gloom prompted yesterday after data showing an improvement in the region’s lending conditions damped the likelihood of further European Central Bank stimulus to spur the euro-area economy.  

“There’s a lot of hope on the earnings season; we’ve had good surprises from some global companies, but the banks suffered from the volatile third quarter,” said Dirk Thiels, head of investment management at KBC Asset Management in Brussels. “Markets have relaxed a bit, but there’s still a lot of jitters around global growth. We would need some comforting economic figures out of Asia and emerging markets to support investor sentiment. That will be a difficult one; demand out of China is only going in one direction.”

Worse-than-expected Japanese trade data today underscored the fragility of the world economy, while Chinese stocks tumbled amid uncertainty over valuations after the recent rally.

European shares have been trading within a tight band for the past two weeks. The Stoxx 600 moved in a 12-point range in that time, with a measure tracking equity swings on course for its fourth-biggest monthly drop on record. While stocks have rebounded from a low last month, they are still down 12 percent since an April record amid concern that China’s slowdown will derail the global recovery. Analysts have cut their profit-growth estimates for 2015 to just 2.8 percent. 

Among shares supporting the Stoxx 600 today, Sky Plc added 2.5 percent after Rupert Murdoch’s European pay-TV company posted a 6 percent increase in first-quarter sales. Syngenta AG advanced 6.3 percent after its chief executive officer unexpectedly quit amid shareholder criticism of his refusal to engage with Monsanto Co. over its $47 billion takeover approach.

Among lenders moving on earnings news, Nordea lost 4.8 percent after Scandinavia’s biggest bank said quarterly profit fell 17 percent as record-low interest rates eroded revenue. Svenska Handelsbanken AB lost 7 percent and SEB AB slipped 4.4 percent after results missed projections. 

Pearson Plc tumbled 16 percent, the most since at least 1988, after the textbook publisher cut its annual-profit forecast.

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