European shares are trading in negative territory in the early afternoon Tuesday, following global indices lower. The move comes as earnings results are mixed, while investors also eye higher bond-yields and consider whether to stick with stocks or switch to fixed income opportunities.
By 1240 BST, the EUROSTOX 600 was down 0.59%, while the EUROSTOXX 50 was off 0.70%. The German DAX was 0.60% lower, the French CAC lost 0.49% and the Spanish IBEX was 1.06% in the red.
As earnings season continues, some European indices constituents’ reports made for disappointing reading.
Sweden’s services firm Loomis shares sank 8.67% to trade at SEK301.40, in the wake of a lower-than-expected fourth quarter profits.
German-based software business SAP shares also fell, Tuesday. The European software giant announced generally positive preliminary earnings, although they were at the lower end of forecasts. SAP also said it had purchased US sales software firm Callidus, for $2.4 billion.
SAP shares slipped 0.75% to €91.40, reversing earlier gains.
But, there were some brighter spots.
Swiss watchmaker Swatch announced better-than-expected 2017 and fourth quarter earnings growth, as sales were supported by China and the broader Asia-Pacific market. Swatch also published an upbeat assessment of its 2018 prospects.
Swatch shares rose 3.32% to CHF416.70.
And, Siemens Gamesa shares gained 5.23% to hit €12.87 as the wind turbine maker posted strong first-quarter results. That news also boosted peer Vestas Wind shares, which rose 5.01% to DKK419.
Euro zone economic growth impresses
Elsewhere in Europe, the latest data from Eurostat showed economic growth across the euro zone hit 2.5% in 2017 – the strongest pace in a decade and up from 1.8% in 2016.
The data release also showed the euro area economy expanded by 0.6% in the fourth quarter of 2017, from the third quarter.
While news that the economic recovery across Europe is continuing is welcome, it has also promoted economists to question whether or not the European Central Bank will allow its QE programme to remain in place until September.
However, countering that argument is the view that withdrawing QE too quickly, would weigh on the current economic recovery.