December 12, 2017
Thursday, January 28, 2016

Weak earnings and banks hit European shares

European shares were falling as disappointing earnings from Roche weighed on the healthcare sector and euro zone banks also came under pressure.

The pan-European FTSEurofirst 300 index was 1.3 percent lower at 1,323.96 points, while the euro zone's blue chip Eurostoxx 50 index also fell, down 1.5 percent.

Roche dropped 4 percent after 2015 net profit from Swiss drug maker fell short of expectations in 2015 and the company's forecast of an improvement this year met a sceptical market response. Its dividend also disappointed.

Fellow pharmaceutical firm Novartis fell 3.3 percent after many target price cuts from brokers following its own disappointing results on Wednesday.

Euro zone banks were down 3.5 percent, with several Italian lenders being suspended "limit down" for the second time in as many days.

An EU scheme to help Italy's banks offload billions of euros of bad loans has been greeted with falls in the sector since Wednesday. The deal is a complex compromise, and could see the banks take significant losses on the debt.

Fashion firm H&M fell 4.2 percent after the fashion firm warned that price reductions to help shift large stocks of winter wear after unusually warm weather and a strong dollar would weigh on its first quarter.

Among the gainers, Electrolux added 3.9 percent, despite reporting a fourth quarter loss, with traders citing a better than expected underlying performance.

Investors were also digesting the latest update from the US Federal Reserve, which kept rates unchanged on Wednesday saying it was "closely monitoring" global economic and financial developments, signaling it wasn't ready to abandon a plan to tighten monetary policy this year.

Meanwhile, Japanese stocks fell in choppy trade with volatility in oil prices and fears of a global slowdown continuing to hurt sentiment, while cautious investors looked forward to the conclusion of the Bank of Japan's policy meeting on Friday.

The Nikkei share average declined 0.7 percent to 17,041.45.

The Topix subindex for foods added 1.3 percent as risk-averse investors bought into defensive stocks, while the air transportation sector rose 1 percent after oil prices fell.

Commodities sectors ended the day lower, with the subindex for iron and steel shedding 3.6 percent and oil and coal products giving up 1.6 percent.

The broader Topix fell 0.6 percent to 1,392.10 and the JPX-NK Index 400 declined 0.7 percent to 12,547.22.

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Tags:  US  stock market  Europe  Nikkei  

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