H&M shares drop 5% after results miss analysts expectations
By Sara Sjolin, MarketWatch
LONDON (MarketWatch)—European stock markets tumbled on Thursday, led by banks, after economic sentiment for the euro zone slipped unexpectedly and U.S. jobless claims were revised upwards. Losses for oil firms also weighed on indexes as oil futures declined.
The Stoxx Europe 600 index XX:SXXP -1.23% lost 1.1% to 261.14.
“There has been massive uncertainty in the markets concerning the euro-zone debt crisis, coupled with concerns over global growth, with much of the macro data coming from the U.S. doing little to allay investor fears,” said Stuart Jamieson, senior dealer at Tradenext.
“Markets may be further hit on the downside if investors develop a “risk-off” attitude, preferring currency/commodity safe havens away from the euro-zone influence.”
The German DAX 30 index DX:DAX -1.77% performed the worst among-major country specific indexes and declined 1.7% to 6,877.63. Car makers weighed on sentiment after S&P said the European car sector is heading toward at least a 5% decline 2012 because of weak economic growth and “downgrades appear possible”. Daimler AG DE:DAI -3.06% lost 3.1%, Volkswagen AG DE:VOW -3.89% fell 4.1% and BMW AG DE:BMW -1.04% declined 1.5%.
ThyssenKrupp AG DE:TKA -1.81% lost 2.1% after Exane BNP Paribas cut the stock to underperform from neutral.
Elsewhere, Spain remained a spotlight for markets as a general strike against government austerity measures got under way a day ahead of the government’s 2012 budget. Major demonstrations were expected across the country with an evening rally planned in Madrid. Spain on strike.
Spain’s IBEX 35 index XX:IBEX -1.12% fell 0.9% to 7,911.80. Yields on 10-year Spanish government bonds ES:10YR_ESP +2.86% added 0.16 percentage point to 5.46% as bond prices tumbled.
“Spain will not get as bad as Greece. But we need clear political leadership tomorrow in Copenhagen to see commitment to fixing the euro and to increase the firewall and to see that they’ll support Spain and Portugal,” said Justin Urquhart Stewart, co-founder of Seven Investment Management.
Euro-zone finance ministers meet in Copenhagen Friday and Saturday and are expected to discuss an increase in the region’s rescue funds to prevent the spread of the sovereign-debt crisis.
In Italy, the yield on 10-year Italian government bonds IT:10YR_ITA +2.73% rose 0.19 percentage point to 5.22%.
The Italian FTSE MIB index XX:FTSEMIB -2.57% tumbled 2.2% to 16,085.10. Banks were among major decliners and Banca Monte dei Paschi di Siena SpA IT:BMPS -8.73% sank 7.4% after reporting a loss of 4.7 billion euros ($6.2 billion) in 2011 due to a goodwill impairment charge. Banca Popolare di Milano SCARL IT:PMI -7.59% lost 7.2% and UniCredit SpA IT:UCG -4.71% fell 4%.
The broader European stock market was sent south after the European Commission’s economic sentiment indicator for the euro-zone fell to 94.4 in March from 94.5 in February, disappointing analysts’ expectations of an unchanged reading.
European shares remained under pressure after initial jobless claims in the U.S. fell by 5,000 to a seasonally adjusted 359,000 last week. Initial claims for the week before were revised up to 364,000 from 348,000. U.S. stocks opened lower on Wall Street.
Retailers, oil firms drop
Among notable decliners in Europe, Swedish fashion retailer H&M Hennes & Mauritz AB SE:HMB -4.95% shed 5.4% after fiscal first-quarter results missed analysts’ expectations as input costs rose.
Other retailers tracked H&M lower. Marks & Spencer Group PLC UK:MKS -3.36% lost 3.4%, Next PLC UK:NXT -1.26% gave up 1.6% and Kingfisher PLC UK:KGF -1.58% traded 1.6% lower.
The FTSE 100 index UK:UKX -1.18% was off 1% at 5,753.97, further pressured by oil firms as crude futures slipped. Royal Dutch Shell PLC UK:RDSA -1.81% UK:RDSB -1.51% RDS.A -1.99% RDS.B -1.81% gave up 0.9% and BP PLC UK:BP -2.37% fell 2%.
Banks were also lower and heavyweight HSBC Holdings PLC UK:HSBA -1.84% HBC -1.80% pulled back 1.6% and Barclays PLC UK:BARC -4.03% BCS -4.08% fell 3.4%.
In France, auto makers were on decline. Peugeot SA FR:UG -3.40% lost 3.3% and Renault SA FR:RNO -2.43% gave up 2.5%.
Oil group Total SA FR:FP -1.10% lost 1.1% in the wake of a gas leak, which started Sunday in the North Sea. The drop weighed on the CAC 40 index FR:PX1 -1.22% , which was off 1% at 3,395.68.
Among other notable decliners in Europe, drug maker Roche Holding AG CH:ROG -1.44% slipped 1.2% after it lifted its cash bid for U.S. gene-sequencing company Illumina Inc. ILMN +4.41% to $51 per share from $44.40 a share. Read about Roche's offer
