European equities nursed heavy losses at the open on Thursday, as investors weighed a mixed bag of earnings and hefty losses in US markets.
Still, the FTSE 100 index traded down 60.56 points, or 0.7%, at 8,093.13. The FTSE 250 was down 201.65 points, 1.0%, at 20,749.19, while the AIM All-Share fell 5.35 points, 0.7%, at 771.29.
The Cboe UK 100 was down 0.7% at 807.72, the Cboe UK 250 dropped 1.1% to 18,155.80, and the Cboe Small Companies fell 0.1% to 17,207.02.
The CAC 40 in Paris slumped 1.4%, while Frankfurt’s DAX 40 traded 1.1% lower.
In New York on Wednesday, the Dow Jones Industrial Average ended down 1.3%, the S&P 500 fell 2.3% and the Nasdaq Composite plunged 3.6%.
In Asia on Thursday, the Nikkei 225 slumped 3.3%, while the S&P/ASX 200 in Sydney ended 1.3% lower. In China, the Shanghai Composite fell down 0.5%, while the Hang Seng was 1.6% lower.
Shares in Europe suffered in response to the morning’s batch of earnings in Europe, as well as some updates from overnight.
Among those falling were food and drink company Nestle, down 4.5% in Zurich on a guidance cut.
Luxury retail continued to suffer, after Kering reported a poor half-year. That stock was down 7.6% in Paris.
Chipmaker STMicroelectronics plunged 11% in Paris as it cut its outlook.
The automotive story was also a drab one, with Stellantis down 9.0% in Milan and Renault down 8.1% in Paris. Further afield, a profit outlook cut from Nissan sent that stock 7.0% lower in Tokyo, while Ford had plunged 12% after hours in New York.
Over in Sydney, the theme of tepid earnings was also evident, as Macquarie fell 3.4% on a poorly-received first-quarter update.
Trade was more resilient in the healthcare sector. Roche upped guidance and shares were rewarded with a 3.3% rise in Zurich. Sanofi also upped its outlook, and it traded 3.9% higher in Paris.
In London, AstraZeneca improved its full-year view, though shares fell 2.3%.
Total revenue in the first-half of 2024 surged 15% to $25.62 billion from $22.30 billion. Pretax profit jumped 19% to $5.29 billion from $4.35 billion. For the second-quarter alone, revenue climbed 13% $12.94 billion, and pretax profit was 15% higher at $2.40 billion.
Looking to the full-year, it now expects total revenue to grow by a ‘mid teens percentage’ at constant currency, its view upgraded from a previously expects ‘low double-digit to low teens rise’.
Unilever rose 6.5% as it backed its outlook. The consumer goods firm reported a rise in revenue and profit in the first-half. Revenue in the first six months of 2024 climbed 2.3% to €31.12 billion from €30.43 billion. Pretax profit increased 5.7% to €5.57 billion from €5.27 billion.
Underlying sales growth for the half-year was 4.1%, helped by a 2.6% rise in margins and a 1.6% pricing increase.
‘We continue to expect underlying sales growth for 2024 to be within our multi-year range of 3% to 5%, with the majority of the growth being driven by volume,’ the firm behind brands such as Dove and Cif said.
Elsewhere in London, ITV fell 5.1% as it cut guidance at its ITV Studios production arm.
The firm now expects revenue for the ITV Studios production arm to ‘be down low single digits’ for the full-year. It had previously expected it to be ‘broadly flat’. The downgrade is due to a ‘small number of key productions being contracted as executive productions rather than co-productions’.
‘The change in contractual arrangement has no impact on profit but does mean we recognise less revenue this year. There remain a small number of contracts under negotiation, which may have a similar out-turn of lower recognised revenue, but the same profit if they are contracted as executive productions. In the revenue guidance for 2024, we have assumed that we will be the main or co-producer,’ the firm said.
Indivior shot up 16%, easing some recent share price pressure on the stock, as it maintained its recently lowered outlook and announced a share buyback.
The specialty pharmaceuticals business said revenue in the first-half of the year improved 10% to $583 million from $529 million. It swung to a pretax loss, however, of $72 million from profit of $120 million.
Its second-quarter revenue rose 8.3% to $299 million from $276 million, but it posted a loss of $135 million, swinging from profit of $62 million.
Selling, general, and administrative expenses in the quarter jumped to $311 million from $133 million. The figure includes costs related to a legal settlement, its US primary listing and the hit from the discontinuation of schizophrenia drug Perseris, announced earlier in July.
‘While 2024 has proved to be a more challenging year than we had anticipated, we remain highly confident in the underlying fundamentals of our business and strategy, and that we are on a clear path to create substantial shareholder value. Reflecting our confidence, we are today announcing a new $100 million share repurchase programme which we intend to execute over an accelerated time frame,’ CEO Mark Crossley said.
The pound was quoted at $1.2881 early on Thursday, down from $1.2926 at the time of the London equities close Wednesday. The euro stood at $1.0840, fading from $1.0857. Against the yen, the dollar was trading at JP¥152.22, down from JP¥153.44.
China’s central bank on Thursday unexpectedly cut a medium-term interest rate by the most in more than four years, marking the latest move by authorities to boost economic growth.
The world’s second-largest economy has encountered severe headwinds in recent years, as a heavily indebted property sector, sluggish consumption and high youth unemployment weigh on confidence.
Beijing has introduced a host of measures in recent months in a bid to get it humming again, but a full rebound has so far proven elusive.
In a surprise move on Thursday morning, the People’s Bank of China slashed the rate for its medium-term lending facility – the interest on one-year loans to financial institutions – to 2.3%, from 2.5%.
The central bank typically makes MLF announcements on a predetermined day in the middle of the month.
The last time the rate was cut was in August, but the latest is the biggest since April 2020.
Brent oil was quoted at $81.00 a barrel early on Thursday, falling from $81.75. Gold was quoted at $2,375.34 an ounce, down from $2,426.06.
Still to come on Thursday is a US gross domestic product reading at 1330 BST.
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