EUROPE MARKETS: European Stocks Pare Losses, But Siemens Shares Under Pressure
By Carla Mozee, MarketWatch
Pound shoved down against euro; Deutsche Bank foresees further decline in Stoxx 600
European equities slipped Thursday, with German industrial heavyweight Siemens AG among the market's decliners, but stock in Italian lender UniCredit SpA was a bright spot in the struggling banking group.
The Stoxx Europe 600 was down 0.1% at 378.43, but was off session lows as most sectors swung higher, except for the oil and gas group.
More earnings reports were delivered Thursday. Among notable share-price movers, Finnish oil refiner Neste Corp. (>> Neste) sank 6.3% as the company's first-half operating profit of EUR236 million fell from EUR282 million a year ago. Analysts polled by Reuters had expected EUR244 million in operating profit.
But Next PLC shares (>> Next) sprang up 8.8%, and were on track for their best session since January 2014, according to FactSet data. The clothing and home furnishings retailer raised the lower end of its full-year sales guidance after an increase in the second quarter.
The pan-European benchmark on Thursday may log its second consecutive decline, as it fell by 0.4% on Wednesday.
"We expect a tactical pullback to 360 on the Stoxx 600," said Deutsche Bank's European equity strategists in a research note Thursday, pointing out that regional stocks have fallen by nearly 5% from their mid-May peak of 396.
"We think this pullback has further to go, as euro area PMIs fade from elevated levels and a strong euro weighs on European earnings. Our tactical Stoxx 600 model points to a local trough of around 360 by late October (around 5% below current levels)," the strategists led by Sebastian Raedler wrote.
The Stoxx 600 did pare losses Thursday as U.K. blue-chip shares flipped higher. The move came alongside a slide in the pound against both the dollar and the euro after the Bank of England cut its growth expectations for the British economy and its outlook for wages next year.
The U.K.'s FTSE 100 leapt 0.7% to 7,464.25.
Stock movers: Siemens AG (>> Siemens) (>> Siemens) shares fell 2.8% as the company said new orders fell in the third quarter . Net profit rose to EUR1.46 billion euros ($1.73 billion), above a Dow Jones Newswires consensus estimate of EUR1.36 billion.
UniCredit (>> UniCredit SpA) shares drove up 6% as Italy's largest bank by assets said second-quarter net profit rose to 945 million euros ($1.1 billion), aided by higher fees and commissions as well as lower provisions for bad loans.
ConvaTec Group PLC (>> ConvaTec Group) shares slid 6.5% after the medical technology maker's first-half operating profit fell to $193.5 million from $209 million a year ago. The company said its Chief Financial Officer Nigel Clerkin will leave , but will continue as a director and CFO until Oct. 31.
Cobham PLC (>> Cobham) tacked on 5.3% as the British defense supplier kept its full-year outlook and said it traded in line with expectations in the first half of the year as it swung to profit.
Inmarsat PLC (>> Inmarsat) fell 3.7%, with the satellite operator's second-quarter net profit falling to $43.6 million amid tough trading in some markets.
National indexes: France's CAC 40 index was up 0.4% at 5,127.61, while Germany's DAX 30 fell 0.3% to 12,144.07.
Italy's FTSE MIB was up 0.3% at 21,647, while Spain's IBEX 35 fell 0.2% to 10,493.
The euro fetched $1.1867, little changed from $1.1857 late Wednesday in New York.