European stock markets drop back after weak company earnings

European stocks dropped on Thursday, hit by bleak earnings from consumer giant Nestle and Dutch digital payments firm Adyen, while sentiment also took a hit following weak economic growth data in the US.

After signs of recovery earlier this week the benchmark Stoxx 600 index hit a volatile patch as investors assessed the impact of record-high interest rates on corporate performance, while staying confident of a European Central Bank rate cut in June.

Dublin

The Iseq closed down 0.5 per cent in line with the subdued performance across Europe as several key stocks remained under pressure. Ryanair, which shed 1.9 per cent in Wednesday’s session, declined almost 1.7 per cent to finish at €20.16.

Otherwise there were few big movers. Bank of Ireland was the main climber, advancing 0.8 per cent to €10.36. Packaging group Smurfit Kappa dropped 0.5 per cent to €39.83, while building materials group Kingspan edged down 0.2 per cent to €82.50.

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London

The FTSE 100 stock index scored its third consecutive record high on Thursday, led by miner Anglo American on a buyout offer from BHP Group, while investors cheered earnings from several blue-chip firms including Unilever, AstraZeneca and Barclays.

The blue-chip FTSE 100 ended the session up 0.5 per cent, after hitting a fresh all-time high of 8,105.59 points earlier in the day.

Anglo American surged 16.1 per cent to an more than 10-month high after BHP made an offer to buy the London-listed miner, valuing its share capital at $38.8 billion. The deal would create the world’s biggest copper miner with around 10 per cent of global output. BHP’s London-listed stock, however, fell 2.2 per cent.

The pharma and biotech index was the top sectoral performer, rising 3.9 per cent, led by a 5.9 per cent jump in AstraZeneca shares after the drugmaker reported quarterly revenue and profit above market estimates.

Unilever rose 5.7 per cent after the consumer goods company posted better-than-expected first-quarter sales growth.

Barclays climbed 6.7 per cent as the lender’s first-quarter trading was better than expected despite a 12 per cent fall in profit.

The mid-cap FTSE 250 fell 0.6 per cent, with WH Smith sliding 6 per cent after the British high street and travel hub retailer flagged lower growth at start of the second half.

Europe

The pan-European Stoxx 600 index closed 0.7 per cent lower after shedding as much as 1.3 per cent intraday, in line with a global stocks rout.

Industrial goods lost 1.8 per cent, leading sectoral declines, as Adyen slumped 18.4 per cent after lower-than-expected first-quarter sales and analysts’ concerns around collected fees being at an all-time low.

Nestle dropped 2 per cent after the world’s biggest packaged food company missed first-quarter organic sales growth estimates, dragging the food and beverages sector down 1.1 per cent.

Technology stocks were also in the red, tracking sharp declines in US peers.

Hermes fell 2.4 per cent as investors booked profits even through the Birkin bag-maker reported a 17 per cent surge in first-quarter sales. LVMH and Richemont also lost 2.8 per cent and 1.2 per cent, respectively.

Spain’s Sabadell jumped 7.6 per cent after forecasting lending income would continue growing in 2024, while Deutsche Bank rose 8.2 per cent following a better-than-expected increase in first-quarter profit.

US

Wall Street tocks slumped on Thursday as most mega-caps fell after Meta’s quarterly results, while sentiment was shaken amid signs of persistent inflation that dampened hopes of the Federal Reserve easing monetary policy anytime soon.

Meta plunged 13 per cent after the Facebook-parent forecast higher expenses and lighter-than-expected revenue.

Other growth stocks also came under pressure, with Alphabet, Amazon.com and Microsoft down between 2.3 per cent and 4.1 per cent.

Alphabet, Microsoft and Intel are scheduled to report their quarterly numbers on Thursday after markets close.

Additional reporting: Reuters

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