European shares subdued amid busy news flow

on Nov 9, 2017

European shares were a touch lower in early afternoon trade Thursday. A mixed bag of earnings updates, plus additional geopolitical and Brexit-related news, all combined to dampen investors’ appetite.

By 1300 BST, the EUROSTOXX 600 and EUROSTOXX 50 were both trading around 0.7% lower from the open. The German Dax was down 0.9%, while the French CAC and Spanish IBEX were off 0.6% and 0.5%, respectively.

Earnings updates

Among the earnings updates earlier Thursday, the performance was mixed.

Dutch insurer Aegon’s shares gained 4.6% after a healthier third-quarter marked by higher fee revenues and fewer insurance claims.

Shares in Engie, the French utility firm, meanwhile, were 1.2% higher, following news that Total would buy it’s LNG business for the price of $1.49 billion. Third quarter profits in line with expectations, from German lender Commerzbank, boosted shares 2.4%.

Share fallers included:

  • ArcelorMittal -2.9%, after the EU regulators said they would investigate its planned purchase of Italian steel plant Ilva.
  • Dutch wind turbine manufacturer Vestas’ shares slid 19%, after it reduced its 2017 profit outlook on increased competition and uncertainty over US taxes.
  • ProSieben shares fell 10% after the firm cuts it full-year profit guidance.

Additional pressures

While the earnings season begins to come towards the end, results driven moves are slowly giving way to additional pressures.

Geopolitical news is among the main drivers of investor sentiment, as US President Trump’s Asian tour continues and the Saudi Prince’s political purge is also digested. The UK political situation remains on investors’ minds, too.

In addition, the outlook for the US tax reform timeline is adding some caution to investor sentiment. Particularly as a change in the timing of its eventual implementation could have consequences on company earnings and investment plans.

The resumption of Brexit talks Thursday as both parties work to break the deadlock, mean the markets await any relevant update there, too.