Europe Stocks Trim Weekly Advance as Travel Shares Lead Lossesby and
Swatch plunges as profit more than halves on weak demand
Stoxx 600 remains below level on day of U.K. referendum
European stocks erased most of their intraday losses at the close, even as a terror attack in France dragged travel shares lower.
The Stoxx Europe 600 Index closed less than 0.2 percent lower, paring an earlier drop of as much as 0.7 percent. Travel and leisure shares posted the biggest slide, with EasyJet Plc, Thomas Cook Group Plc and hotel operator Accor SA down at least 2.7 percent. At least 84 people were killed when a driver plowed his truck into a late-night crowd in Nice on Bastille Day. History has shown that the impact of terror attacks on stock markets tend to be short-lived.
Investors are also paying attention to earnings reports. Swatch Group AG tumbled 7.8 percent after weak demand for its watches in Hong Kong, France and Switzerland led to an earnings plunge. Peer Richemont dropped 3.1 percent.
“The attack in Nice is of course truly a horrible accident, but in terms of the market reaction, these kinds of shocks do not last very long,” said Michael Kapler, an equities manager at Mittelbrandenburgische Sparkasse in Potsdam, Germany. “We have a little bit of a breather from the gains we’ve seen over the past few days. Right now the central banks are in focus again -- how they are going to deal with the aftermath of Brexit. The focus is there -- as well as on the earnings season both in Europe and the U.S.”
Europe’s benchmark climbed in three of the past four sessions, sending the gauge to a weekly gain of 3.2 percent. It has rebounded since a June 27 low as optimism grew central bankers will act to limit the fallout of the country’s vote to leave the European Union and some earnings reports beat estimates. The gains haven’t been enough to overcome losses from the Brexit vote, and technical indicators are signaling more challenges ahead.
Commodity producers, this year’s best performers on the Stoxx 600, declined. Precious-metal producers Fresnillo Plc and Randgold Resources Ltd., which surged amid demand for haven assets in the aftermath of Brexit, fell at least 1.4 percent.
Swedish Orphan Biovitrum AB climbed 7.6 percent after reporting quarterly earnings and sales that beat estimates.