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(Alliance News) - It was a tough start to the day on Friday for equities in Europe, taking a lead from a dire session in Asia, as continued disappointing tech earnings in the US tested investor sentiment.
Following sharp share slumps for Alphabet, Microsoft and Meta Platforms earlier in the week, this time it was Amazon's turn to upset.
Amazon sunk 13% in after-hours trade in New York, as the e-commerce platform reported a decrease in quarterly net income on foreign exchange headwinds, but did note a rise in sales.
Apple fared better after its own quarterly result, the stock rising 0.4% in the after-hours session.
The FTSE 100 index was down 61.43 points, or 0.9%, at 7,012.26 early Friday. The mid-cap FTSE 250 was down 226.95 points, or 1.3%, at 17,854.97, and the AIM All-Share was down 4.58 points, or 0.6%, at 804.88.
The Cboe UK 100 was down 0.8% at 701.18, the Cboe UK 250 down 1.2% at 15,346.29, and the Cboe Small Companies down 0.3% at 12,368.06.
In European equities on Thursday, the CAC 40 in Paris was down 0.8%, while the DAX 40 in Frankfurt was 1.0% lower.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "The wider concerns from last night's results point to a weakening economy, which although we've been warned about, still have the ability to spook the market when we see the tangible effects. The world's largest retailer took investors by surprise last night with an utterly bleak outlook for sales, while profits could do a disappearing act because of fierce competition and soaring inflation."
In the US on Thursday, the Dow Jones Industrial Average closed up 0.6%, but the wider S&P 500 closed down 0.6% and the tech-heavy Nasdaq Composite ended 1.6% lower.
CMC Markets chief market analyst Michael Hewson noted the poor tech performance is "confusing" traders "as the sharp slowdown in the fortunes of the tech sector, contrasts with the outperformance of more traditional economic bellwethers".
He added: "The contrast is also outweighing the anticipation that central banks may be looking to slow the pace of their rate hiking cycle."
European Central Bank President Christine Lagarde sounded tough on inflation on Thursday, but a slight 'dovish tweak' to the central bank's monetary policy statement has sent the euro below dollar parity.
The euro traded at USD0.9947 early Friday, down from USD0.9984 late Thursday.
The ECB said interest rates would need to be raised "further" - a slight change in language after it previously said rates would need to be hiked over the "next several meetings".
As expected, the Frankfurt-based central bank lifted its key policy rates by 75 basis points on Thursday.
The ECB has now hiked by 200 basis points over the past three meetings. Lagarde told reporters the ECB "still has ground to cover".
Turning to Japan's central bank, the Bank of Japan stuck to its ultra-loose monetary policies on Friday, even as the yen comes under pressure from aggressive tightening by the US Federal Reserve and other central banks.
The stark contrast between Japanese and US monetary policy has caused the yen to plummet to 32-year lows against the dollar, prompting the government to intervene to prop up the currency.
The dollar was quoted at JPY146.91 early Friday in London, up from JPY145.90 late Thursday. The Japanese Nikkei 225 index gave back 0.9% on Friday.
In London, NatWest was at the bottom of the FTSE 100, losing 7.2%.
The bank reported strong income growth in the third quarter, boosted by both increased lending and higher interest rates, but it warned it is keeping a close on eye on any change in behaviour from its customers.
In the three months to September 30, operating profit before tax rose to GBP1.09 billion from GBP976 million a year before.
Putting a cap on the bank's profit, NatWest set aside GBP247 million in the quarter to cover an expected increase in bad loans, which is reversed from a GBP221 million gain the year prior.
"At a time of increased economic uncertainty, we are acutely aware of the challenges that people, families and businesses are facing up and down the country. Although we are not yet seeing signs of heightened financial distress, we are very conscious of the growing concerns of our customers, and we are closely monitoring any changes to their finances or behaviours," Chief Executive Alison Rose said.
Peers Barclays and Lloyds were down 2.8% and 2.3%, repectively.
British Airways-parent International Consolidated Airlines lost 1.4%, despite posting a positive quarter.
IAG swung to profit in the third quarter, as revenue improved on pre-pandemic levels, despite lower capacity. It swung to a pretax profit of EUR1.01 billion from a loss of EUR714 million a year before. Revenue nearly tripled year-on-year to EUR7.32 billion, from EUR2.71 billion.
Passenger revenue saw the strongest recovery, growing to EUR6.42 billion from EUR2.00 billion. Compared to pre-pandemic 2019 levels, it was 22% higher.
Glencore fell 3.3%.
The miner saw a drop in production in the first nine months of 2022 across most of its metals, with the exception of strong growth from cobalt and nickel, forcing the miner to lower its annual guidance.
In the nine months to September 30, copper production was down 14% year-on-year to 770,500 tonnes, while gold was down 15% to 504,000 ounces.
Chief Executive Gary Nagle said: "Operational performance over the third quarter was impacted by a range of events including extreme weather in Australia, industrial action at nickel assets in Canada and Norway - since resolved - and the emergence of significant supply chain issues in Kazakhstan stemming from the Russia-Ukraine war. Full-year 2022 production guidance has, accordingly, been reduced for those affected commodities."
Glencore said its commodities trading Marketing arm will make a significantly reduced by still above-average contribution in the second half.
Peers Anglo American, Rio Tinto and Anto were down 3.2%, 2.9% and 2.1%, respectively.
Elsewhere in Asia, the Shanghai Composite lost 2.3% and the Hang Seng index in Hong Kong was 4.1% lower in late trade.
The S&P/ASX 200 stock index in Sydney closed down 0.9%.
Sterling was quoted at USD1.1517 early Friday, down from USD1.1573 at the London equities close on Thursday.
Gold was priced at USD1,653.10 an ounce early Friday, lower from USD1,662.60 on Thursday evening in London. Brent oil was trading at USD93.82 a barrel, down from USD94.75 late Thursday.
The economic calendar has a GDP and CPI reading from Germany at 0900 BST and 1200 BST, respectively, before the personal consumption expenditures inflationary gauge from the US at 1330 BST. Core PCE is the Fed's preferred inflationary measure.
By Paul McGowan; paulmcgowan@alliancenews.com
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