(For a live blog on European stocks, type LIVE/ in an Eikon
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* BP, Shell, Total slide between 2.5% and 3.8%
* Miners track declines in commodity prices
* German economic sentiment surprises to the upside
* SAP slumps, reverts to sole CEO to handle coronavirus
pandemic
(Adds details about ZEW survey, updates prices to close)
By Sagarika Jaisinghani and Susan Mathew
April 21 (Reuters) - European stocks fell on Tuesday as the
double whammy from a historic plunge in U.S. crude prices and
lacklustre quarterly earnings reports spooked investors already
worried about the damage to the global economy from the
coronavirus pandemic.
The pan-European STOXX 600 index broke a
three-session winning streak to end 3.4% lower.
Basic materials stocks were the biggest decliners,
losing almost 6%. The world's largest listed miner BHP Group
slid after warning of a sharp drop in global steel
production excluding China due to the COVID-19 pandemic.
All the major European country indexes slipped, a day after
U.S. crude futures plummeted to below zero for the first
time in history with rapidly filling storage capacity causing
traders to flee contracts that would deliver oil barrels to them
in May.
The West Texas Intermediate contract recovered to trade
above $1 on Tuesday but its collapse spilled into June futures
contracts as investors fretted over a deep global recession with
the near halt in business activity crushing both supply chains
and oil demand.
BP Plc, Royal Dutch Shell Plc and Total SA
lost between 2.5% and 3.8%, taking the energy index
4.3% lower.
"Dividends for oil companies are in big trouble," said David
Trainer, chief executive officer of investment research firm New
Constructs.
"With such low prices, they have little to no revenues. As
oil and gas firms cut capital spending and delay or close down
projects, those with already low profitability are at greater
risk of cutting dividends to preserve resources."
The STOXX 600 had recovered about 25% from a March trough as
risk appetite picked up on a raft of global stimulus, but
investors have turned cautious again with economic data
underlining the havoc wreaked by sweeping lockdown measures.
The ZEW survey on German economic sentiment did however
surprise with a rise but investors took little solace from the
data and Germany's DAX led losses in the region, down
4%.
"Too good and too early to be true," said Carsten Brzeski,
global head of macro at ING Economics, about the data. It
suggests there will be light at the end of tunnel but just not
yet, he said.
Europe's most valuable tech company SAP was among
the biggest drags on the benchmark STOXX 600 after the company
abruptly ended a six-month experiment in dual leadership due to
the pandemic.
The first-quarter earnings season also kicked into high gear
with a batch of multinational firms scrapping dividends and
withdrawing financial forecasts to deal with the fallout from
the pandemic.
Finland's Wartsila's first quarter profit dropped
45%, while Primark owner Associated British Foods
slipped after suspending its interim dividend.
But not all earnings were bad. Topping the pan-region index
was online payments firm Adyen after it reported
growth in revenue and core earnings for the first quarter.
(Reporting by Sagarika Jaisinghani in Bengaluru
Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila and
Kirsten Donovan)
