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Investors sit in front of an electronic board at a brokerage house in Beijing, China, June 27, 2016. REUTERS

European stocks fall on weak earnings

WT24 Desk

NEW YORK – European stocks were under pressure Thursday following disappointing earnings reports, while Japanese stocks faltered ahead of a key central bank policy announcement, AFP reports.  In Frankfurt, Volkswagen shares retreated after costs related to its 2015 diesel emissions cheating scandal hit quarterly earnings.

In Paris, Carrefour shares dropped sharply following disappointing results due to low fuel prices, currency fluctuations and restructuring costs. London-listed Lloyds Banking Group fell as it announced it will axe another 3,000 jobs by 2017, partly due to the low interest rate environment, while Royal Dutch Shell fell on a profit collapse due to weak oil prices and refining margins.

The weak reports underscored worries about slow growth in Europe, especially after Britain’s vote to leave the European Union. Paris fell 0.6 percent, while Frankfurt and London both shed 0.4 percent.  US markets finished mostly higher, with tech titan Facebook rallying on a 186 percent rise in second quarter profit to $2.05 billion due to growing online advertising revenues.

Shares of Amgen and MasterCard also rose following earnings reports, offsetting declines from Ford after it warned of lower profits due to a cooling of the hot US auto market.  US stocks remain near all-time highs. Sixty-eight percent of S&P 500 companies to report earnings so far have bested expectations, said S&P Global Market Intelligence.

“The majority of earnings reports are better than expected,” said Michael James, managing director of equity trading at Wedbush Securities. “Certainly there are some disappointments, but for the most part, they are better than estimates.”  Tokyo led most Asian markets lower, with the Nikkei sliding 1.1 percent on worries over the size of the Bank of Japan’s expected stimulus announcement due Friday.

Among the options, the BoJ could expand its mammoth asset buying plan or cut interest rates further into negative territory in a bid to stir lending and stoke the wider economy. The Nikkei had risen 1.7 percent on Wednesday after Prime Minister Shinzo Abe unveiled a 28 trillion yen ($266 billion) fiscal stimulus program without offering details.

However, Japanese markets have swung in recent days as speculation has shifted about the size of the stimulus program.

– Key figures around 2100 GMT –

New York – DOW: DOWN 0.1 percent at 18,456.35 (close)
New York – S&P 500: UP 0.2 percent at 2,170.06 (close)
New York – Nasdaq: UP 0.3 percent at 5,1524.98 (close)
London – FTSE 100: DOWN 0.4 percent at 6,721.06 points (close)
Frankfurt – DAX 30: DOWN 0.4 percent at 10,274.93 points (close)
Paris – CAC 40: DOWN 0.6 percent at 4,420.58 points (close)
EURO STOXX 50: DOWN 1.1 percent at 2,966.10 (close)
Tokyo – Nikkei 225: DOWN 1.1 percent at 16,476.84 (close)
Hong Kong – Hang Seng: DOWN 0.2 percent at 22,174.34 (close)
Shanghai – Composite: UP 0.1 percent at 2,994.32 (close)
Euro/dollar: UP at $1.1076 from $1.1062
Pound/dollar: DOWN at $1.3166 from $1.3224
Dollar/yen: UP at 105.32 yen from 105.31 yen

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