By Ankika Biswas and Pranav Kashyap
(Reuters) -Europe’s main stock index dropped on Tuesday, bruised by a handful of bleak quarterly results from industry majors such as energy giant BP (NYSE:), drugmaker Novartis (SIX:) and lender Santander (BME:), while caution also prevailed ahead of some crucial economic data.
The pan-European closed 0.6% lower, after touching an over one-week high intraday.
BP’s shares dropped 5% to July 2022 lows after the company’s third-quarter profit fell to the lowest in almost four years, pushing the energy sector index 1.2% down.
Novartis stock fell 4% as investors focused on the Swiss company’s lower-than-expected sales of a promising radiopharmaceutical, even as it raised its 2024 earnings guidance for the third time.
The healthcare sector index dipped nearly 1% to a three-week low, also dented by a 7.4% fall in dental-implants maker Straumann following a weak third-quarter performance in its North American business.
Travel and leisure was the worst-hit sector, as shares in German airline group Lufthansa slumped 5% after it reporting lower third-quarter operating profit.
However, Asia-focused lender HSBC Holdings (NYSE:) jumped 3.3% after better-than-expected third-quarter profit and a $3 billion share buyback programme.
Of the STOXX 600 companies that have reported third-quarter earnings to date, 53% of them exceeded estimates, shy of the typical beat rate of 54%, fresh LSEG data showed.
Investors are also turning focus to a host of economic data including the euro zone bloc’s third-quarter GDP and October inflation, and U.S. GDP and non-farm payrolls print, all due this week.
Adding to economic concerns that prompted a European Central Bank rate cut earlier this month, the German Chamber of Commerce and Industry cut its previous forecast for a stagnation and expect zero growth in 2025 for Europe’s largest economy.
After hitting a record high last month, the STOXX 600 has turned sluggish. Caution surrounding the U.S. election could potentially delay the index’s journey to a key 530-point level.
“The 530 is a possibility before the end of the year, given the fundamentals potentially support it. But I think that would very much depend on the outcome of the U.S. election,” said Fiona Cincotta, senior market analyst at City Index.
Investors also awaited Alphabet (NASDAQ:)’s results later in the day for the technology sector’s outlook, with a host of U.S. megacap earnings scheduled throughout the week.
Among other earnings, shares in Wartsila tumbled 13.5% after the Finnish engineering group’s third-quarter order intake miss.
Poland’s Santander Bank rose 4% after third-quarter results beat, while Adidas (OTC:) gained 3.8% on strong third-quarter growth in China.
Read the full article here