European stocks fall on disappointing earnings and Fed fears

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European stocks fell on Wednesday on some disappointing corporate earnings reports and investor jitters ahead of the expected rate hike announcement from the U.S. Federal Reserve.

The pan-European Stoxx 600 index fell 1.1% and most regional indices were also in negative territory.

DUBLIN

The Iseq index ended the session down 0.5% at 7,274.38, with travel and leisure-related stocks among the main decliners. Ryanair fell 3.5% to €14.15, while Dalata Hotel Group fell 3.4% to €4.32.

Contrary to the trend, Paddy Power owner Flutter Entertainment jumped 4.9% to €103.25 after announcing that its revenue had increased by 6% in the first three months of the year , thanks to strong growth in the United States.

Bank of Ireland stood out as a weak spot among financials, down 1.1% to €5.74.

LONDON

The UK’s benchmark stock index fell, weighed down by weakness in consumer staples and healthcare stocks, as investors awaited the Federal Reserve’s interest rate decision later in the day .

The blue-chip FTSE 100 index closed down 0.9%, with drugmaker Astrazeneca, GSK and cyclical names such as Diageo, Unilever among the top drags.

Rio Tinto and Anglo American fell after a downgrade in Liberum’s ratings weighed on the mining sector, sending it down 1.6%.

Oil majors Shell and BP rose nearly 0.5% each as crude prices rebounded after the European Union, the world’s largest trading bloc, announced plans to phase out oil imports Russia, which offset concerns about demand from the main crude importer, China.

Online fashion retailer Boohoo fell 12.4% as it reported a 28% drop in its annual base revenue and warned that external factors related to the pandemic would continue to affect it this year.

Aston Martin Lagonda rose 6.7% after the luxury carmaker appointed former Ferrari boss Amedeo Felisa as its new chief executive.

EUROPE

Pandora fell 2.1% after the Danish jeweler reported heightened uncertainty around its full-year earnings forecast.

Swedish automaker Skanska plunged 9.8% after posting lower profits and bracing for possible project cancellations in its Eastern European markets as an indirect effect of the war in Ukraine.

However, Norwegian energy group Equinor gained 3.1% as the company posted record quarterly pre-tax profit after conflict in Ukraine sparked an energy supply crisis that sent natural gas prices skyrocketing. historic highs.

NEW YORK

The main stock indexes on Wall Street were down in the early afternoon, dragged down by growth stocks ahead of a widely expected interest rate hike.

Still, bank stocks generally rose after two-year U.S. Treasury yields, the most sensitive to the Federal Reserve’s interest rate outlook, rose to their highest level since November 2018. interest tends to increase banks’ lending margins.

Strengthening yields continued to haunt megacap growth stocks. Microsoft, Google-parent Alphabet, Meta Platforms, Tesla, Amazon and Nvidia were all in negative territory.

Two separate data sets showed private employers hired the fewest workers in two years last month, while expansion in the services sector unexpectedly lost some momentum in April.

Concerns about a hit to economic growth from a hawkish Fed, mixed earnings at some large growth companies, conflict in Ukraine and pandemic-related lockdowns in China have hammered Wall Street recently, with shares of highly valued growth bearing the brunt of the sell- off.

Starbucks gained 5.5% after the coffee chain saw comparable quarterly sales rise 12% in North America. Livent Corp jumped 21.2% after posting better-than-expected quarterly profit and boosting its 2022 revenue outlook on stronger demand for lithium used in electric vehicle batteries. – Additional reports, Reuters

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