EUROPE MARKETS: European Stocks Pare Losses, But Siemens Shares Under Pressure
Pound shoved down against euro; Deutsche Bank foresees further decline in Stoxx 600
European equities slipped Thursday, with German industrial heavyweight Siemens AG among the market's decliners, but stock in Italian lender UniCredit SpA was a bright spot in the struggling banking group.
The Stoxx Europe 600 was down 0.1% at 378.43, but was off session lows as most sectors swung higher, except for the oil and gas group.
More earnings reports were delivered Thursday. Among notable share-price movers, Finnish oil refiner Neste Corp. (NESTE.HE) sank 6.3% as the company's first-half operating profit of EUR236 million fell from EUR282 million a year ago. Analysts polled by Reuters had expected EUR244 million in operating profit.
But Next PLC shares (NXT.LN) sprang up 8.8%, and were on track for their best session since January 2014, according to FactSet data. The clothing and home furnishings retailer raised the lower end of its full-year sales guidance (http://www.marketwatch.com/story/next-sales-rise-lifts-lower-end-of-guidance-2017-08-03) after an increase in the second quarter.
The pan-European benchmark on Thursday may log its second consecutive decline, as it fell by 0.4% on Wednesday. (http://www.marketwatch.com/story/european-stocks-struggle-as-oil-and-bank-shares-are-dragged-down-2017-08-02)
"We expect a tactical pullback to 360 on the Stoxx 600," said Deutsche Bank's European equity strategists in a research note Thursday, pointing out that regional stocks have fallen by nearly 5% from their mid-May peak of 396.
"We think this pullback has further to go, as euro area PMIs fade from elevated levels and a strong euro weighs on European earnings. Our tactical Stoxx 600 model points to a local trough of around 360 by late October (around 5% below current levels)," the strategists led by Sebastian Raedler wrote.
The Stoxx 600 did pare losses Thursday as U.K. blue-chip shares flipped higher. The move came alongside a slide in the pound against both the dollar and the euro (http://www.marketwatch.com/story/pound-climbs-as-traders-wait-for-boes-super-thursday-2017-08-03) after the Bank of England cut its growth expectations for the British economy and its outlook for wages next year.
The U.K.'s FTSE 100 leapt 0.7% to 7,464.25. (http://www.marketwatch.com/story/ftse-100-listless-as-investors-wait-for-carneys-super-thursday-comments-2017-08-03)
Stock movers: Siemens AG (SIE.XE) (SIE.XE) shares fell 2.8% as the company said new orders fell in the third quarter (http://www.marketwatch.com/story/siemens-profit-up-beating-views-new-orders-fall-2017-08-03). Net profit rose to EUR1.46 billion euros ($1.73 billion), above a Dow Jones Newswires consensus estimate of EUR1.36 billion.
UniCredit (UCG.MI) shares drove up 6% as Italy's largest bank by assets said second-quarter net profit rose to 945 million euros (http://www.marketwatch.com/story/unicredit-profit-edges-up-on-higher-fees-2017-08-03-24853246)($1.1 billion), aided by higher fees and commissions as well as lower provisions for bad loans.
ConvaTec Group PLC (CTEC.LN) shares slid 6.5% after the medical technology maker's first-half operating profit fell to $193.5 million from $209 million a year ago. The company said its Chief Financial Officer Nigel Clerkin will leave (http://www.marketwatch.com/story/convatec-swings-to-profit-names-cfo-designate-2017-08-03), but will continue as a director and CFO until Oct. 31.
Cobham PLC (COB.LN) tacked on 5.3% as the British defense supplier kept its full-year outlook (http://www.marketwatch.com/story/cobham-swings-to-profit-backs-2017-outlook-2017-08-03) and said it traded in line with expectations in the first half of the year as it swung to profit.
Inmarsat PLC (ISAT.LN) fell 3.7%, with the satellite operator's second-quarter net profit falling to $43.6 million amid tough trading in some markets.
National indexes: France's CAC 40 index was up 0.4% at 5,127.61, while Germany's DAX 30 fell 0.3% to 12,144.07.
Italy's FTSE MIB was up 0.3% at 21,647, while Spain's IBEX 35 fell 0.2% to 10,493.
The euro fetched $1.1867, little changed from $1.1857 late Wednesday in New York.
(END) Dow Jones Newswires
August 03, 2017 08:56 ET (12:56 GMT)