European stocks subdued by mixed corporate earnings and Brexit
(Reuters) – Mixed earnings reports kept a lid on European stocks, with London’s midcap index suffering from doubts over whether British lawmakers will back the government’s Brexit bill on Tuesday.
The pan-European STOXX 600 finished up just 0.1%, with a weaker pound helping London’s exporter-laden FTSE 100 .FTSE outperform with a 0.7% gain. Others including Germany’s DAX .GDAXI and France’s CAC 40 .FCHI were marginally higher.
The FTSE 100 was also lifted by a 24% jump in food delivery firm Just Eat (JE.L) after Dutch internet conglomerate Prosus (PRX.AS) made an unsolicited $6.3 billion cash bid.
But British household goods maker Reckitt Benckiser (RB.L) hit its lowest level in more than seven months after cutting its full-year sales forecast for a second time this year.
French specialty minerals company Imerys (IMTP.PA) dropped 13% after cutting its 2019 outlook, while Norway’s Aker BP (AKERBP.OL) slipped 0.9% as it slashed its full-year oil output target.
“We expect it to be a weak quarter and have already priced that in because we are seeing a slowdown in the macro outlook,” said Aneeka Gupta, associate director of research at WisdomTree.
Last week, the world’s biggest yogurt maker Danone (DANO.PA) had cut its 2019 sales growth target, while auto maker Renault (RENA.PA) and truckmaker Volvo (VOLVb.ST) issued dour profit forecasts amid a broad-based slump in auto sales.
Britain’s midcap index .FTMC and Irish stocks .ISEQ, gauges of Brexit sentiment, fell 0.6% and 1.1%, respectively, although they both hovered near one-year highs after British Prime Minister Boris Johnson clinched a last-minute deal with the European Union last week.
Johnson told the parliament on Tuesday that if it delayed his Brexit legislation he would abandon his attempt to ratify the deal and push for an election instead.
Lawmakers vote at around 1800 GMT on the 115-page Withdrawal Agreement Bill and then vote on the government’s extremely tight timetable for approving the legislation.
Banking stocks were flat on the day, after Swiss bank UBS (UBSG.S) reported a 16% slide in third-quarter net profit and cut high-paying investment banking staff after a disappointing performance at the division.
Automakers gained 0.8%, led by gains in Continental (CONG.DE) after the German engineering group booked 2.5 billion euros ($2.8 billion) in impairments, citing slower automobile production growth, and said it will spin off its powertrain division rather than float it.
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