EUROPE MARKETS: European Markets Struggle As Investors Respond To HSBC And BHP Earnings
February 19 2019 - 6:45AM
Dow Jones News
By Emily Horton
European stocks were down on Tuesday, as investors responded
poorly to earnings from HSBC and BHP Group while trade negotiations
between the U.S. and China continue in Washington.
HSBC Holdings PLC lost 3% after a disappointing set of annual
results.
How are markets performing?
The Stoxx Europe 600 lost 0.4% to 368.32 on Tuesday, after the
index climbed by 0.2% on Monday.
Italy's FTSE MIB led the region's decliners losing 0.9% to
20,142.77. The FTSE 100 followed, dropping 0.5% to 7,187.13.
France's CAC 40 lost 0.3% to 5,151.31, while Spain's IBEX 35
lost 0.3% and Germany's DAX (DAX) fell by 0.2% to 11,272.50.
The euro remained flat on Tuesday, at $1.1307, as did the pound
at $1.2927.
What's driving the markets?
The markets mainly reacted to the latest set of company earnings
from heavyweights HSBC Holdings PLC (HSBA.LN) (HSBA.LN)(HSBA.LN)
and the world's largest listed miner by market value BHP Group
(BHP.LN).
HSBC Holdings PLC (HSBA.LN) (HSBA.LN) reported lower than
expected fourth-quarter profits
(http://www.marketwatch.com/story/hsbc-misses-profit-blames-brexit-trade-tensions-2019-02-19),
leading to a 3% drop in the share price. The full results show that
the bank secured a full-year net profit of $12.6 billion, less than
the $13.71 billion analysts expected.
Newly appointed HSBC chief executive John Flint said that the
bank had been on track to meet targets until revenues collapsed in
parts of the bank in November. He said it was "very much a
fourth-quarter problem" and that the bank started 2019 in a
"fundamentally different" position.
Results from other U.K. banks are expected later this week,
including Lloyds Banking Group PLC (LLOY.LN), which added 0.4% on
Tuesday, and Barclays PLC (BCS) which stayed mostly flat.
BHP Group (BHP.LN) also failed to impress investors, despite 87%
rise in first-half net profits to $3.76 billion
(http://www.marketwatch.com/story/bhp-profit-jumps-dividend-steady-2019-02-19-14852755),
leading to a 1.2% drop in share price. "Its results have missed
expectations on multiple metrics after a series of production
issues at some of its copper and iron ore mines. Rising costs have
also been an issue." Russ Mould, investment director at AJ Bell
said.
In Washington, U.S.-China trade negotiations continue, with
President Donald Trump reportedly
(https://www.wsj.com/articles/as-china-talks-resume-trump-seeks-a-win-on-trade-11550537816)
pursuing an ambitious makeover for U.S. commercial ties. However,
investors are still concerned about the progress made on
contentious issues such as Washington's dissatisfaction over
Chinese technology and trade policies.
Meanwhile, data from the Ifo Institute showed that although
Germany's current account surplus shrank, it remained the world's
largest net exporter, Reuters reported
(https://uk.reuters.com/article/uk-germany-economy-trade-surplus/germany-tops-japan-with-worlds-largest-current-account-surplus-in-2018-ifo-idUKKCN1Q80MX).
What stocks are active?
In other active stocks, Wirecard AG (WDI.XE) remained in the top
spot for Europe after Monday's surge
(http://www.marketwatch.com/story/wirecard-shares-rise-on-german-short-selling-ban-2019-02-18),
with shares climbing by 8%.
German building materials provider HeidelbergCement AG (HEI.XE)
added 4%, after the it announced a rise in fourth-quarter revenue
fueled by higher sales
(http://www.marketwatch.com/story/heidelbergcement-revenue-up-sees-higher-demand-2019-02-19).
InterContinental Hotels Group PLC (IHG) added 2%, after the
owner of the Crowne Plaza and Holiday Inn hotel brands said
revenues increased
(http://www.marketwatch.com/story/intercontinental-hotels-profit-drops-on-costs-2019-02-19)
to $4.34 billion from $4.08 billion a year before.
(END) Dow Jones Newswires
February 19, 2019 06:30 ET (11:30 GMT)
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