SAP down after disappointing results from Oracle
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — European stock markets fell Wednesday as debt worries resurfaced after the European Central Bank’s first three-year funding operation for the region’s banks drew more interest than expected. Losses for software company SAP AG and drug stocks also weighed.
The Stoxx Europe 600 index XX:SXXP -0.51% fell 0.5% to 237.3.
The Stoxx 600 index added as much as 1.3% in the moments after the results of the ECB funding operation were released, but gains quickly eroded amid signs of more need by Europe’s banks than was expected.
The ECB said 523 banks requested €489 billion ($641 billion) in funding from the central bank in a bid to boost liquidity.
A Reuters consensus had predicted funding requests worth €310 billion.
“The good news is a lot more banks will be well funded throughout the next three years. They need to place the money short term and will be buying bonds in European sovereign countries, obviously,” said Christian Tegllund Blaabjerg, chief Economist at FIH Erhvervsbank.
“But on the flip side of the coin, it also signals a lot more banks than originally thought need capital and that is negative news,” he said. “It sort of implies the banking sector is far worse off than originally expected.”
Technology stocks were among the losers on Wednesday. Shares of German software firm SAP AG DE:SAP -5.79% tumbled 6% after rival Oracle Corp. ORCL -13.49% disappointed with its earnings report.
Oracle shares sank over 13% in mid-morning trade in the U.S.
The German DAX 30 index DX:DAX -0.95% fell 0.9% to 5,791.5, with retailer Metro AG DE:MEO -3.92% off 3.8% amid losses for retailing and food stocks, which made broad gains earlier in the week. Utility E.On AG DE:EOAN -1.65% fell 1.6%.
Car stocks managed gains, with BMW AG DE:BMW +0.52% and Daimler AG DE:DAI +1.04% up 0.6% and 1.6%, respectively, as auto shares carried on with gains seen in the prior session.
Banking stocks, which gained earlier in the day, reversed course, with Paris heavyweights Societe Generale SA FR:GLE -2.53% off 3.4% and Credit Agricole SA FR:ACA -1.46% down 2.1%.
The French CAC 40 index FR:PX1 -0.82% fell 0.8% to 3,030.5.
Shares of retailer Carrefour SA FR:CA -3.97% fell 4.7%. The Financial Times said Knight Vinke, the U.S. activist fund, was talking to the company about the possibility of taking a seat on the board, which would put investor pressure on the group. The FT cited persons familiar with the situation. Carrefour declined to comment on the report.
The FTSE 100 index UK:UKX -0.55% fell 0.5% to 5,389.7. Shares of Lloyds Banking Group PLC LYG +5.56% UK:LLOY +5.57% bucked losses for the rest of the sector, up 5.5% after Exane BNP Paribas upgraded it to outperform from underperform.
Energy-related stocks also fell, with BG Group PLC UK:BG -1.58% down 1.6% and BP PLC BP -1.15% BP -1.15% UK:BP -1.00% off 1%.
