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European stocks sink as tech gloom spreads, Valeo plunges

European stocks sink as tech gloom spreads, Valeo plunges
A trader works at Frankfurt's stock exchange in Frankfurt, Germany February 6, 2018. REUTERS/Ralph Orlowski   -   Copyright  RALPH ORLOWSKI(Reuters)
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LONDON (Reuters) – European shares crumbled on Friday, tracking a decline in U.S. stock futures after tech stocks Alphabet and Amazon missed results expectations, further sapping risk appetite as European earnings also disappointed with Valeo harshly punished.

The leading index of euro zone stocks <.STOXX50E> fell 1.5 percent with Germany’s DAX <.GDAXI> down 1.7 percent and France’s CAC 40 <.FCHI> down 1.8 percent.

Overall the third-quarter earnings season has been marred by rolling sell-offs across global markets and marked by sharp downgrades to earnings estimates.

Disappointing Amazon and Alphabet results reignited investors’ anxieties about the overwhelming dominance of tech stocks – prized for seemingly unstoppable growth – in this market cycle.

The pan-European STOXX 600 was on track for its worst month since August 2015.

On the day earnings disappointments caused sharp falls.

Shares in French auto parts maker Valeo <VLOF.PA> sank more than 19 percent after its second profit warning in three months, flagging disruption from tougher European emissions tests and a sharp sales downturn in China.

Peer Faurecia <EPED.PA> also tumbled 9.2 percent after it announced an agreement to buy Japanese car navigation system maker Clarion from Hitachi.

Altran <ALTT.PA> shares surged 16 percent after the engineering and tech consultancy reported strong third-quarter results.

Swedish appliances maker Electrolux <ELUXb.ST> sank 13.5 percent after it trimmed its market demand expectations and forecast higher costs due to increasing raw material prices and tariffs.

Shares in French household appliances maker SEB <SEBF.PA> also fell 15.3 percent after its third-quarter sales figures.

Results from banks were more mixed after more encouraging results from UBS had boosted it in the previous session.

Spain’s Banco Sabadell <SABE.MC> topped the IBEX with a 5.5 percent gain after its third-quarter profit beat expectations.

Britain’s RBS <RBS.L> meanwhile tumbled 4 percent after it warned of economic uncertainty and its profit lagged forecasts. The lender said it had taken a 100 million pound impairment provision to account for greater uncertainty.

(Reporting by Helen Reid; editing by Josephine Mason)

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