European markets drop to three-week low amid downbeat company earnings

European stocks hit a three-week low on Thursday, hurt by disappointing earnings reports and elevated United States bond yields, though British stocks regained some ground after the Bank of England raised rates in line with expectations.

Stocks globally came under pressure as US bond yields hit nine-month peaks following strong private jobs data and the announced refunding of Washington’s maturing debt.

Further dampening the mood, a survey showed the downturn in euro zone business activity worsened more than initially thought in July as the slump in manufacturing was accompanied by a further slowing of growth in the bloc’s dominant services industry.

Dublin

The Iseq index closed down by less than 0.1 per cent, outperforming the major European indices as gains for Bank of Ireland and Ryanair kept its slippage to a minimum.

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Bank of Ireland rose 2.4 per cent to €9.72 as interest rates went up again in the UK, while Ryanair added 1.3 per cent, finishing at €15.75.

Kerry Group lost much of the gains it made in Wednesday’s session after it released first-half earnings data that beat estimates. On Thursday, it fell back 1.7 per cent, closing at €90.94.

Flutter Entertainment was sluggish once again, declining more than 0.6 per cent to €169.95.

London

Britain’s FTSE 100 was dragged down by a flurry of downbeat earnings, though the export-heavy index regained some ground after the Bank of England raised interest rates by a quarter percentage point.

The blue-chip FTSE 100 lost 0.4 per cent after falling as much as 1.6 per cent before the rate decision, which took the bank’s key interest rate to a 15-year peak of 5.25 per cent.

Rate-sensitive home builders, however, added 0.2 per cent while the real estate sector rose 1 per cent.

Telecom firm BT Group and consumer staples major Unilever were drags, down 4.2 per cent and 1.4 per cent respectively, as their shares traded ex-dividend.

Europe

The pan-European STOXX 600 index fell 0.6 per cent, ending its third straight session in the red. In Frankfurt, the Dax declined 0.8 per cent, while the French Cac 40 finished 0.7 per cent lower.

Germany’s Infineon tumbled 9.3 per cent after the chipmaker forecast fourth-quarter revenue would come in below market expectations due to weak demand from makers of personal computers and smartphones.

Deutsche Lufthansa slid 5.5 per cent despite the German airline group’s upbeat forecast for travel demand, as investors worried about high costs eating into profit.

Making the banks index one of the few sectoral gainers for the day, shares of Société Générale, France’s third-biggest listed bank, gained 3.5 per cent after it reported better-than-expected quarterly earnings. Energy firms were also a bright spot, up 0.8 per cent.

Anheuser-Busch InBev climbed 1.3 per cent after the world’s largest brewer reported higher-than-expected quarterly earnings and retained its 2023 forecast.

[ European stock markets edge lower after mixed bag of company earnings ]

US

Wall Street trading was choppy, with the main indices slipping at first and then pulling into positive territory by about 6pm Irish time. A jump in bonds yields, underwhelming corporate earnings and a slew of economic data pointing to stubborn inflation kept investors on edge as they awaited quarterly results from Apple and Amazon.com, due after the close of markets.

Qualcomm tumbled 10.2 per cent after a gloomy forecast signalled more pain for the biggest maker of smartphone chips from the ongoing slump in the consumer electronics market.

PayPal Holdings shed 10.7 per cent as investors were disappointed by the payments firm’s quarterly operating margin, even as executives said they expect improvement towards the end of the year.

Meanwhile, Moderna gained 1.1 per cent as the company raised its annual forecast for Covid-19 vaccine sales to up to $8 billion (€7.3 billion). – Additional reporting: Reuters