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European shares fall on weak earnings

Thursday, July 31 16:48:22

Europe's FTSEurofirst 300 share index hit a three-week low today, led lower by Adidas after the group warned about business in Russia.

Argentina's default and concerns of an early U.S. rate hike also rattled investors.

The broader market was dragged down by sharp declines in some individual stocks following the announcement of their earnings. The broader market sell-off accelerated in the afternoon after the U.S. market opened lower and extended losses later in the session

German sportswear firm Adidas fell 15.2 percent, the top decliner on the FTSEurofirst 300 index, Portugal's Banco Espirito Santo sank nearly 50 percent at one point to a record low after booking a 3.6 billion euro first-half loss and disappointing earnings at Spanish healthcare firm Grifols sent its shares down 11.2 percent.

BES, down 37 percent, pushed Portugal's benchmark PSI 20 index 3.4 percent lower to underperform the wider market, while Adidas dragged Germany's DAX 2 percent down after saying it will scale back plans to expand in Russia and overhaul its golf business.

According to Thomson Reuters StarMine data, about 40 percent of STOXX Europe 600 companies have reported results so far in the earnings season, of which 55 percent have met or beaten profit forecast. On average, quarterly profits are up 7.1 percent year-over-year.

Spanish stocks also came under pressure, with Madrid's IBEX dropping 2.3 percent, as traders cited worries over Spanish companies' exposure to Latin America after Argentina defaulted on its debt on Thursday.

At 1457 GMT, the FTSEurofirst 300 was down 1.4 percent at 1,346.84 points after falling up to 1,346.78, the lowest since early July, with analysts saying the sell-off might continue in the near-term on worries about further monetary tightening in the United States.

For more visit: www.businessworld.ie