AIM IP specialist Tekcapital to sell or float all four portfolio companies 'within 2 years'. Watch the full video here

Less Ads, More Data, More Tools Register for FREE

UPDATE 2-European stocks hit 1-month low as Trump tweet adds to economic worries

Thu, 30th Jul 2020 10:00

(For a live blog on European stocks, type LIVE/ in an Eikon
news window)

* German economy shrinks by record 10.1% in Q2

* Risk assets sell off globally after Trump tweet

* STOXX 600 hits one-month low, erases monthly gains

* Beer sales recovery signs lifts AB InBev shares
(Updates to market close)

By Sruthi Shankar

July 30 (Reuters) - European shares sank to a one-month low
on Thursday, hit by underwhelming earnings reports, a dire
reading of the German economy's health and U.S. President Donald
Trump raising the possibility of delaying November's
presidential election.

The pan-European STOXX 600 index closed 2.2% lower,
erasing all its gains for the month, while Germany's DAX
slumped 3.5%, leading regional losses.

Risk assets across the globe sold off sharply after Trump
tweeted "delay the election until people can properly, securely
and safely vote???", although the U.S. constitution bestows that
power on Congress.

Growth-sensitive sectors like banks, insurers
, automakers and energy firms bore the
brunt of the sell-off in Europe, falling between 3.5% and 4.3%.

European equities had already fallen after a preliminary
reading showed Germany's gross domestic output shrank by 10.1%
in the second quarter, worse than the 9% contraction predicted
by economists in a Reuters poll as the COVID-19 pandemic took
its toll.

"Germany's record drop in GDP fuels extra concern that the
rest of Europe might have a deeper slump," Edward Moya, a senior
market analyst at Oanda, wrote in a note.

The data had investors worried that an economic recovery
from coronavirus crisis might take longer than expected, with
numbers from the United States sparking similar concerns.

About 40% of the companies listed on the STOXX 600 have
reported second-quarter earnings so far, and 64% of those have
surpassed beaten-down profit expectations, according to
Refinitiv data.

However, there were a slew of disappointments on Thursday,
with Britain's Lloyds Banking Group falling 7.6% as it
swung to a rare pretax loss in the first half and Spain's BBVA
dropping 8.1% as it reported a near 50% decline in net

Automakers also took a hit as Germany's Volkswagen
unveiled a first-half operating loss and slashed its
dividend, while France's Renault posted a record net
loss of 7.29 billion euros ($8.58 billion) in the first half of
the year.

"When companies report in-line or quasi in-line numbers,
that's no longer good enough for the markets to reward them,"
said Maarten Geerdink, head of European equities at NN
Investment Partners.

Among the bright spots, Anheuser-Busch InBev gained
1.4% after saying it was encouraged by a global beer sales
recovery in June.

British drugmaker AstraZeneca rose 1.6% as it backed
its 2020 forecasts.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb
Chakrabarty and Mark Potter)

Related Shares

More News

UK to give under 40s alternative to AstraZeneca vaccine

(Sharecast News) - The UK government decided on Friday to offer people under 40 an alternative to the AstraZeneca Covid-19 vaccine, reported Bloomberg.

Today 09:49

All under-40s to be offered alternative to AstraZeneca vaccine

All under-40s to be offered alternative to AstraZeneca vaccine

Today 08:49

AstraZeneca reports positive results in Phase 3 lung cancer drug trial

AstraZeneca reports positive results in Phase 3 lung cancer drug trial

Today 08:32

AstraZeneca's Imfinzi demonstrates benefit in combination with antibody

(Sharecast News) - AstraZeneca reported on Friday that 'Imfinzi' and tremelimumab with chemotherapy demonstrated an overall survival benefit in the 'POSEIDON' trial for first-line stage four non-small cell lung cancer, making it the first phase 3 trial to demonstrate an overall survival benefit with tremelimumab.

Today 07:42

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.