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Weekly market wrap: European stocks fall on earnings miss

European markets stock image
European markets stock image Copyright Canva/sefa ozel
Copyright Canva/sefa ozel
By Indrabati Lahiri
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European stocks saw a turbulent week as several companies missed earnings forecasts and US yields climbed.

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European stocks struggled somewhat this week with more companies missing earnings estimates and warning about lower full-year profits.

The CAC 40 index saw a fall of 0.51% this week, clocking in at €7,045.44 on Friday morning. The Stoxx 600 did slightly better, with a mostly flat performance over the week, trading at €443.79 on Friday morning.

The FTSE 100 index fell by 8.75% this week, trading at £7.363.92 on Friday afternoon.

Investors were also concerned about more hawkish comments from US Federal Reserve chair Jerome Powell, indicating that rate cuts may not be on the agenda yet.

CAC 40 top weekly gainers

Schneider Electric saw a rise of 6.07% this week, following the company announcing its medium term targets and an expansion of its partnership with Compass Datacenters. The partnership will now see a new influx of $3 billion (€2.8 billion), said Schneider Electric at its Capital Markets Day meeting.

Electrical systems company Thales inched up 2.44%, on the back of increased confidence in its naval technology, as showcased to NATO in Portugal recently. The company has also announced that it will invest €100 million in its Space Smart factory, based in Rome. This will be done through the joint venture between Leonardo and Thales, called Thales Alenia Space.

Safran shares climbed up 2.29%, following an increase in Q3 2023 revenues, propped up by CFM spare part sales. It also recently launched a joint venture with India’s Hindustan Aeronautics for helicopter engines. The new venture will be known as Safhal Helicopter Engines.

L’Oreal rose 2.27% as the company’s investments in green sciences make progress, along with increased confidence in Chinese consumer demand rebounding.

Pharmaceutical giant Sanofi shares advanced 1.52% as the company ventured further into artificial-intelligence led drug discovery. However, the company is also facing increased investigations and probes for potential market manipulations.

CAC 40 top weekly losers

Payment services company Worldline showed a weekly decline of 7.19%, following an outlook cut recently. However, earlier this month, shares had plunged as much as 55%, as consumer sentiment dropped drastically, following a downbeat sales forecast.

Luxembourg-based steel company ArcelorMittal slid 5.88% this week after a mining accident in Kazakhstan shook investors, prompting the company to hand over their operations in the country to the government. ArcelorMittal is also currently in a legal battle with Liberty Steel, regarding unpaid debt totalling €140 million.

Rolling stock manufacturer Alstom shares fell 4.93%, following increased warnings about cash flows recently, as well as uncertainties regarding its Derby train factory.

Pernod Ricard dropped 4.79%, as the company reported weaker-than-expected sales for its FY2024 first quarter. The French liqueur company is also exploring divestment options for some of its wine business. It could also be caught up in the weak sentiment generally affecting the luxury goods sector at the moment, especially with Richemont missing earnings estimates recently.

Automobile manufacturer Stellantis inched down 4.70%, amid a slew of North American strikes, as well as flailing Chinese demand.

The US 10-year Treasury yields dropped 0.45% this week, with the US dollar also showing a decline of -0.32%.

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