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The Financial Express

European shares tumble as banks shares dip

| Updated: July 24, 2018 12:56:00


European shares slip as banks shares dip

European shares tumbled on Friday as autos and banks stocks gave up their gains amid rising trade tensions which caused a selloff in the Chinese yuan and US stock markets overnight.

Autos shares, the most sensitive to trade tensions as US officials work towards slapping tariffs on car imports, were the biggest fallers, down 1.1 per cent, having enjoyed some relief this week.

Financials were the biggest drag on the pan-European STOXX 600 as sentiment on US-China relations soured, while investors bought sectors like healthcare and consumer staples, considered less risky.

The STOXX 600 fell 0.1 per cent as earnings streamed in with several big disappointments causing shares to slide.

Paper maker Stora Enso sank 11.9 per cent after reporting that second-quarter profits missed expectations, blaming production problems, maintenance and tight wood supply.

It dragged down peer UPM-Kymmene, down 3.6 per cent, while paper packaging maker Huhtamaki also fell 6.5 per cent after its results.

UK insurer Beazley fell 12.7 per cent to the bottom of the STOXX after reporting a 64 per cent fall in its first-half profit as returns were hit by rising US interest rates.

Faurecia initially made gains after it reported higher first-half profit and raised its outlook, but the stock fell back 5.2 per cent as analysts saw margin growth as disappointing, reports Reuters.

Among rare gainers were Recordati and Orion, both gaining from broker recommendation upgrades.

Meanwhile, in an earnings season where investors are honing in on companies’ future guidance, profit warnings savaged some shares.

Shares in food processor Wessanen fell 22 per cent to a one-year low after the firm cut its organic growth outlook for the year to “moderate”.

Belgian steel wire maker Bekaert plunged 25 per cent to a five-year low after it said it expected underlying operating profit 20 per cent below analysts’ estimates in the first half, blaming wire rod costs partly driven up by tariffs.

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