European equities fall on poor corporate earnings

Eurostoxx 50:2,952.02 (–48.37) Frankfurt DAX:7,373.93 (–125.77) Paris CAC:4,043.13 (–53.71)

EUROPEAN STOCKS slid for a second day yesterday, as companies from Holcim to Vestas Wind Systems reported earnings that missed estimates.

The Stoxx Europe 600 Index sank 1.4 per cent to 278.52.

“Given how many companies have both come in line or outperformed earnings expectations, it raises the bar of expectation and makes it harder for those companies yet to report to satisfy investors,” said Joshua Raymond, a market strategist at City Index in London.

“The weaker equity session we are seeing is more about profit taking than anything else” after the recent rally, he said.

Portugal’s PSI-20 was the best-performing index, with a 0.2 per cent drop, after the nation reached agreement on a European Union- led bailout that will provide as much as €78 billion ($116 billion) in aid and allow more time to reduce the country’s budget deficit.

Portugal in April became the third country to request EU assistance after Greece and Ireland.

Holcim slid 4.1 per cent to 71.90 Swiss francs. The company reported first-quarter profit that fell short of analysts’ estimates as raw-material costs climbed and governments postponed infrastructure projects.

Vestas tumbled 8 per cent to 163.50 kroner after posting a first-quarter net loss more than twice as big as the average analyst estimate.

BP, Europe’s second-biggest oil company, declined 2 per cent to 448.7p, the lowest price this year.

Petroleum Geo-Services dropped 4.7 per cent to 75.65 kroner as the world’s third-biggest surveyor of oil and natural-gas fields posted a wider than estimated loss.

Rio Tinto sank 3.3 per cent to 4,152p as copper fell on concern China, the world’s largest consumer of the metal, may take more steps to tighten credit.

Wincor Nixdorf plunged 13 per cent to €47.53, the biggest drop since July 2009. The German maker of banking machines and cash registers said second-quarter net income fell 8 per cent.

Actelion rallied 6.6 per cent to 47.85 francs, its biggest gain in five months.

Meda jumped 9.7 per cent to 68.20 kronor for the biggest increase in the Stoxx 600. – (Bloomberg)