EUROPE’S benchmark stock index snapped a four-day winning streak on Tuesday, weighed down by basic resources and energy stocks, while French industrial gases firm Air Liquide jumped to an all-time high after hiking its 2025 margin target.
The continent-wide Stoxx 600 closed 0.1 per cent lower, after ending at a two-year high on Monday and nearing a record high, supported by upbeat earnings from industry heavyweights and expectations of more than four rate cuts this year.
Basic resources shed 1.8 per cent, with investors’ demand for more support for China’s economy capping gains in copper prices after a deeper-than-expected mortgage rate cut by the world’s top metals consumer. Energy dropped 1.1 per cent as oil prices fell on an uncertain global demand outlook.
Leading sectoral losses, technology lost 1.7 per cent, with software firm Temenos sliding 5.6 per cent after forecasting slower earnings growth in 2024.
On the flip side, Air Liquide surged 8.3 per cent on doubling its 2025 margin target following a better-than-expected annual operating profit, booting the chemicals sector 2.5 per cent higher to a seven-week high.
Meanwhile, European Central Bank data showed negotiated euro zone wage growth slowed in 2023 final quarter, confirming expectations that pay growth has peaked although it remains far above a level consistent with 2 per cent inflation. The data is seen as an important variable in determining the timing of rate cuts.
“Even if this increase was slightly lower than in the third quarter, the all-clear cannot be given,” Commerzbank’s senior economist Marco Wagner said in a note.
“Existing wage agreements analysed by the ECB indicate that wage growth will remain high in the current year. In addition, the proportion of companies expecting price increases is rising again.”
Among other top movers, Barclays added 8.6 per cent after laying out a three-year plan to revive flagging share price including axing £2 billion of costs, returning £10 billion (S$17 billion) to shareholders and investing in its high-returning UK bank.
IHG climbed 5.4 per cent after the Holiday Inn-owner posted slightly better-than-expected annual room revenue and said it expected to return more than US$1 billion to shareholders in 2024.
Auto parts supplier Forvia extended its decline, down 21 per cent in two days, after announcing job cut plans for Europe.
Renault declined 4.2 per cent after data showed the French carmaker’s total registrations fell 2.9 per cent in January.
German dialysis specialist Fresenius Medical Care dropped 4.5 per cent as analysts highlighted a weak outlook for patient volumes.
Out of the Stoxx 600 companies that have reported fourth-quarter earnings to date, 54.1 per cent exceeded estimates, in line with the typical beat rate, LSEG data showed. REUTERS
