By Simon Kennedy
LONDON (MarketWatch) -- European stocks edged lower Wednesday,
with defense group Saab and satellite-navigation company TomTom
falling after disappointing earnings announcements, while chemicals
giant BASF gained after lifting its outlook.
The Stoxx Europe 600 index slipped 0.1% to 265.07, extending the
previous session's decline, which was driven by China's decision to
hike interest rates.
The unexpected move from China pushed stocks sharply lower on
Wall Street Tuesday, while Asian markets mostly lost ground
Wednesday as they got their first chance to react to the decisions,
though the Shanghai Composite index recovered from early losses to
trade marginally higher.
Among the main European indexes, the U.K.'s FTSE 100 fell 0.1%
to 5,701.39 and the French CAC 40 index slipped 0.2% to
3,800.22.
The German DAX 30 index dropped 01.% to 6,482.74.
Swedish defense and aerospace group Saab was one of the big
fallers in Europe, dropping 5.6% after it cut its outlook, saying
restructuring costs in the fourth quarter mean operating profit for
the year will now be lower than for 2009.
Dutch satellite navigation equipment maker TomTom fell 1.6%
after it said profit in the latest quarter dropped by more than a
third as its profit margin declined, though it also reaffirmed its
outlook for the year.
In Paris, shares of PSA Peugeot Citroen slipped 1.5%. The French
car maker said revenue grew 10% in the third quarter and lifted its
earnings guidance for the year. However, the update wasn't bullish
enough for investors, who had already pushed the stock up by around
15% over the previous couple of weeks.
On the positive side, German chemicals giant BASF rose 1.3%
after raising its outlook for the year and reporting a 23% jump in
sales for the third quarter.
Mining stocks were also relatively strong, with BHP Billiton
(BHP) climbing 1.4% after announcing a rise in iron-ore production
and following a report that its $39 billion bid for Potash Corp. of
Saskatchewan (POT) is likely to be rejected by the Saskatchewan
government.
Rio Tinto (RIO) rose 1.1% in London after saying it would invest
$3.1 billion to expand its iron-ore production in Australia.
Among smaller companies, shares in Hansen Transmissions
International , which makes gearboxes for wind turbines, slumped
over 17% in London after it slashed its revenue forecast for the
year as customers delayed orders.