European stocks fall on back of disappointing earnings

European stocks fell on Friday as disappointing earnings from several companies, including Sanofi, NatWest Group and Moncler, weighed on the region.

Dublin

The Irish index of shares ended the week slightly higher, with gains in building and betting stocks offsetting some of the declines.

But bank shares weighed on the market, with Bank of Ireland falling more than 2 per cent to €8.56, and Permanent TSB falling 3 per cent, while AIB was largely flat. FBD was 2.2 per cent higher.

Ryanair rose 1.2 per cent to €14.44 and Kingspan was 1.56 per cent higher. Meanwhile, hotel group Dalata shed 1 per cent and Glanbia was down 1.2 per cent.

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London

Britain’s FTSE 100 fell on Friday, with the benchmark index posting its second weekly drop after a series of underwhelming earnings updates, with NatWest’s gloomy outlook the latest to weigh on banks.

The FTSE 100 closed 0.9 per cent lower, with consumer staples such as Unilever and Diageo falling more than 2 per cent each and pulling the index lower.

Shares of NatWest slumped 11.6 per cent to the bottom of the FTSE 100, and suffered their biggest one-day drop in seven years since Brexit in 2016, after a profit downgrade and as it faced regulatory scrutiny over potential breaches in its “debanking” of former Brexit Party leader Nigel Farage.

Drugmakers AstraZeneca and GSK fell more than 2.5 per cent each after French peer Sanofi’s downbeat forecast.

IAG beat forecasts with a strong third-quarter profit, but it flagged economic uncertainties and was unsure how the Middle East turmoil could affect bookings and jet fuel costs into next year.

Shares of the British Airways owner eased 0.6 per cent.

The mid-cap FTSE 250 snapped a three-day losing streak to climb 0.5 per cent, but still ended its sixth straight week lower.

Europe

The Stoxx 600 index was down 0.8 per cent, with the healthcare sector leading declines. Drugmaker Sanofi plunged 19 per cent as a surprise forecast for lower profit next year overshadowed optimism about a plan to spin off the consumer health division.

Among other single stocks, Italy’s Moncler became the latest luxury company this season to disappoint, as analysts noted weaker trends into the latter part of the year. Drinks company Rémy Cointreau also fell after cutting its annual sales guidance.

There were a few bright spots in earnings, including Ubisoft Entertainment, which rose after the video-game maker reported a “major bookings beat” for the second quarter.

New York

The Nasdaq outperformed peers on Friday as robust updates from Amazon.com and Intel lifted beaten-down megacaps, while investors also drew comfort from data that showed inflation rose largely in line with expectations.

Amazon.com jumped 8.4 per cent after the ecommerce giant reported a pickup in growth at its most profitable cloud business.

Intel rallied 9.0 per cent after the chipmaker forecast fourth-quarter revenue and margins above estimates. Chip stocks Advanced Micro Devices and Nvidia added 3.6 per cent and 1.3 per cent respectively.

Megacaps Microsoft, Meta Platforms, Tesla and Apple rose between 0.8 per cent and 2.9 per cent at the end of a rough week for Big Tech.

At 11:58am. ET, the Dow Jones Industrial Average was down 141.09 points, or 0.43 per cent, at 32,643.21, the S&P 500 was up 6.63 points, or 0.16 per cent, at 4,143.86, and the Nasdaq Composite was up 141.43 points, or 1.12 per cent, at 12,737.04.

Consumer discretionary and information technology led gains among the major S&P 500 sectors, while energy was the top laggard.

Weighing on the Dow, Chevron fell 5.5 per cent after the oil major reported a drop in third-quarter profit.

Shares of Exxon Mobil lost 1.8 per cent after its year-on-year earnings plunged nearly 54 per cent, though it posted a higher profit compared with the prior quarter.

Ford Motor sank 9.2 per cent after withdrawing its full-year results forecast due to “uncertainty” over the pending ratification of its deal with the United Auto Workers union, and warning of continued pressure on electric vehicles. – Additional reporting: Reuters, Bloomberg

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