Credit Suisse Drags European Stocks Down Even as Miners Surgeby
The Swiss bank and Daimer declined after reporting earnings
ING posted gains in main banking units, lower provisions
Losses in Credit Suisse Group AG and Daimler AG after earnings announcements dragged European stocks lower, even as commodity producers rallied the most since 2011.
After a day of jumps and slumps, the Stoxx Europe 600 Index closed down 0.2 percent, dropping for a fourth straight session. Credit Suisse slumped to its lowest price since 1992 after posting its biggest quarterly loss in seven years. Daimler AG fell 3.2 percent after saying growth will slow down. That contrasted with energy and commodity producers, which remained up all day. Even Royal Dutch Shell Plc, which reported a slump in profit, added 4.7 percent.
Fluctuations in the Stoxx 600 mirrored moved in oil. The gauge climbed as much as 1.1 percent and dropped 1.5 percent.
“Oil and materials are once again driving stocks,” said John Plassard, senior equity-sales trader at Mirabaud Securities in Geneva. “We’ll be at the mercy of oil for a long time, it will keep bringing volatility.”
A gauge tracking equity swings has jumped 34 percent this year as the Stoxx 600 has lost 10 percent, with concern about bad loans at banks adding to worries about an oil rout and China’s economy. The gauge trades at 14.3 times estimated earnings, near a one-year low and almost 10 percent below the valuation for the Standard & Poor’s 500 Index.
The slowdown in emerging countries is posing a major threat to recovery in the euro area, the European Commission said today, as it trimmed its 2016 growth forecast for the 19-nation region and warned inflation would be much slower than expected. Bank of England Governor Mark Carney cited similar concerns. In a speech in Frankfurt, Mario Draghi said the fact that inflation is weak globally won’t stop the European Central Bank from adding stimulus for the euro area if needed.
Most energy companies climbed. Statoil ASA surged 9.1 percent after deepening investment cuts to maintain dividends, and Neste Oyj rose 2.1 percent after posting better-than-estimated earnings.
Among other stocks moving on earnings, ING Groep NV jumped 8.9 percent as quarterly profit beat estimates. AstraZeneca Plc lost 6.1 percent after forecasting a decline in earnings and sales for the year. Swisscom AG dropped 2.9 percent after annual net income missed projections.