Markets fret as mixed corporate earnings overshadowed by trade dispute

European shares dipped on Wednesday as mixed corporate earnings failed to quell fears about the growing US-China trade conflict.

DUBLIN

Packaging maker Smurfit Kappa closed 3.02 per cent ahead at €36.14 after reporting that profit before tax rose 70 per cent to €416 million in the first six months of the year from €245 million during the same period in 2017.

The group’s stock was up 4 per cent at one point earlier in the day. About 460,000 of its shares changed hands in Dublin on Wednesday.

FBD Holdings dipped 0.48 per cent despite reporting that its first-half profits rose almost 70 per cent to €18.4 million in the face of a net €6.6 million pay out for damage from Storm Emma's blizzards in March.

Trade negotiations buoy stocks as Facebook plunges

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European shares retreat as tech stocks and industrials disappoint

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European shares reach six-week high as trade war fears retreat

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European stock rise but tech woes weigh on US shares

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Index heavyweight, building materials giant, CRH, slid 2.66 per cent to €28.50 after US rival Summit Materials issued a profit warning. CRH is one of the biggest players in the US market and earns half its revenues there.

Food group Glanbia, which is due to report interim results next week, surged 6.6 per cent to €15. Dealers suggested that investors felt the stock had been over sold lately.

Ryanair fell 4.26 per cent to €13.50 as the airline's industrial relations woes appeared to mount. According to reports shortly before the market closed, the British Airlines Pilots' Association took a step towards to industrial action at the carrier, which faces possible strikes in Ireland, Belgium, Germany, Holland and Sweden.

LONDON

Mining and materials shares sold off on a slide in metals prices after the Trump administration threatened further tariffs on China. Miner Rio Tinto's shares tumbled 3.4 per cent to 4,054 pence after first-half results missed earnings expectations.

Lloyds was a bright spot. The bank's share rose 1.7 per cent to 63.41p after the bank's first-half profit jumped 23 per cent, in line with expectations.

Among mid-caps, outsourcer Capita fell 8.6 per cent after reporting weaker than expected free cash flow and warning the return to sales growth would take time.

Aggreko topped the mid-caps with a 9.3 per cent gain, hitting a seven-month high after the diesel and gas generator manufacturer first-half profit beat consensus forecasts.

Airline services provider, BBA Aviation, brought up the rear on the FTSE 250, hitting a near 18-month low after profits and margins missed forecasts. Its shares plunged 11.43 per cent to 310p.

EUROPE

Auto stocks were the biggest sectoral fallers, down 2.4 per cent as shares in Schaeffler DE, Volkswagen and Porsche fell as much as 5.1 per cent.

Shares in Ferrari dropped 8.4 per cent after the company's chief executive said that its financial targets to 2022 were "aspirational".

The sector has been hit particularly hard by uncertainty over global trade and tariffs. Analysts said tough rhetoric from the US had rattled investors.

On the upside, Air France-KLM rose more than 4 per cent after second-quarter results beat estimates despite recent strikes.

France's BNP Paribas reported forecast-beating second-quarter profits, though its shares gave up early gains to end 0.5 per cent lower.

US

Wall Street’s benchmark S&P 500 index dipped on Wednesday, ahead of the Federal Reserve’s decision on interest rates, but Apple’s robust earnings lifted the technology sector and the Nasdaq.

Apple's shares rose 5.8 per cent to hit a record $201.32, inching closer to become the world's first trillion-dollar company after forecasting blowout current-quarter sales.

Facebook's shares fell 0.2 per cent and was the only member of the so-called FAANG group to be trading lower. Netflix, Amazon and Google-parent Alphabet were trading up marginally.

The gains were capped by worries about an escalation in the US-China trade dispute after the Trump administration planned to propose tariffs of 25 per cent, more than double the initially proposed 10 per cent, on $200 billion worth of imported Chinese goods. Caterpillar slipped 3.2 per cent and 3M declined 2 per cent. Both stocks were the biggest drags on the Dow. –Additional reporting: Reuters