Europe Stocks Edge Lower as Carmakers' Slump Offsets Financials

HSBC Profit Beats Estimates

European stocks fell for a third day as a retreat in automobile shares offset a rally in financial services firms.

The Stoxx Europe 600 Index lost 0.1 percent at the close, widening its decline in July to 0.4 percent in the second straight month of losses. European stocks have been hurt by a strengthening euro which has fueled concerns for European earnings.

  • Carmakers lost 0.8 percent to end the session at the lowest level this year. The index has lost 6.5 percent in the past two weeks amid allegations that the German’s major automakers colluded to limit the pace of technological advances in their vehicles and stifle competition.
  • Financial services companies rose 0.7 percent, widening its advance this month to 0.1 percent.
  • Shares in HSBC Holdings Plc gained 1.8 percent after the lender’s second-quarter profit beat analysts’ estimates and it said it will spend as much as $2 billion buying back stock.
  • Overall, corporate earnings growth is firming up in Europe, Natixis strategists Sylvain Goyon and Thomas Zlowodzki wrote in a note, saying their multi-factor model points to stronger profit growth in the region than for U.S. companies in the second half of this year.

— With assistance by Elena Popina

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