Weakness among tobacco stocks and some broker downgrades weighed on European shares, sending them lower on the final trading day of July as analysts dissected what was beginning to look like an “underwhelming” earnings season.The pan-European STOXX 600 index was down 0.1 per cent, while euro zone stocks and blue chips fell 0.3 per cent to 0.4 per cent.
DUBLIN
The Iseq index lost 0.2 per cent to 6,649.39. Permanent TSB lost 2.4 per cent to €2.05 as the bank succumbed to further negative media commentary over the weekend. This follows the bank's badly-received interim report last week in which the bank's 28 per cent non-performing loans ratio attracted most of the attention.
However, Bank of Ireland advanced 1.7 per cent to €7.05 as Deutsche Bank reiterated its "buy" rating on the stock after the lender posted better-than-expected first-half results on Friday. "Given the capital generation of the business we expect BoI to be a strong dividend payer in the future," said Deutsche analyst David Lock, adding that he has increased his price target on the stock by 20c to €8.30 as well as his earnings forecasts.
C&C dropped 0.6 per cent to €3.06 as strong second-quarter cider sales reported by Heineken in Ireland on Monday "indicates that the challenging competitive landscape" for the Irish group behind Bulmers remains, according to Goodbody Stockbrokers.
Property-related stocks were also out of sorts, with Hibernia Reit off 2.2 per cent, while Irish Residential Properties Reit lost 1.8 per cent. Abbey declined by 1.6 per cent.
LONDON
Strong results from heavyweight bank HSBC helped British blue-chips hold on to gains on Monday, putting the index ahead for the month of July, though tobacco stocks tumbled further following a new US regulatory clampdown.
The FTSE 100 rose 0.1 per cent, and ended July 0.8 per cent higher, outperforming European benchmarks which finished the month in the red.
HSBC shares pared gains to close 1.8 per cent higher after Europe's biggest bank said profit grew 5 per cent in the first half, and announced its third share buy-back in a year.
Cigarette makers Imperial Brands and British American Tobacco were still reeling from the US Food and Drug Administration's announcement on Friday that it would cut nicotine in cigarettes to non-addictive levels. Imperial fell 5.9 per cent, while BAT dropped 5 per cent.
EUROPE
As the European second-quarter earnings season gathers pace, around 46 per cent of MSCI Europe firms have reported results, 59 per cent of which have either met or beaten analysts’ expectations, according to Thomson Reuters data.
France's blue-chip index fell 0.7 per cent, hitting its lowest since April 24th, when the first-round victory of Emmanuel Macron in the presidential race boosted stock markets.
French power switch and socket maker Legrand was the worst performing, down 4.2 per cent after disappointing first-half results.
Essilor also fell 4 per cent to a five-month low, dragging on Italian merger partner Luxottica, after brokers Natixis and Invest Securities cut their price targets on the French lens maker.
Shares in Spanish supermarket chain DIA fell 5 per cent, weighed by broker downgrades as analysts adapted their estimates after sharp gains in the stock when LetterOne investment trust took a stake in the firm on Friday.
NEW YORK
US stocks fluctuated in early afternoon trade on Wall Street, with the S&P 500 swinging between gains and losses – though the gauge remained set for a fourth straight monthly gain.
Meanwhile, the slew of corporate earnings continues. Apple, Tesla and Berkshire Hathaway are all set to unveil results this week.
Shares of Snap fell 4.1 per cent to $13.10 and hit a record low as a share lockup ended, allowing for sales by early investors and pushing it further below its March initial public offering price.
Scripps Network rose after Discovery Communications said it would buy the media company for $14.6 billion (€12.3bn).
Charter Communications shares gained after the US cable operator said on Sunday it was not interested in buying wireless carrier Sprint Corp. – Additional reporting: Reuters, Bloomberg
