Europe open: Stocks drift lower; Ericsson tumbles on profit warning

European stocks drifted a little lower in early trade following negative sessions in the US and Asia, with Ericsson under the cosh after a profit warning.

At 0900 BST, the benchmark Stoxx Europe 600 was flat, Germany’s DAX was down 0.1% and France’s CAC 40 was 0.3% weaker.

In currency markets, the pound was up 1.4% versus the dollar at $1.2283 following a Bloomberg report suggesting Prime Minister Theresa May has accepted to hold a parliamentary vote on her plans for taking the UK out of the European Union, raising hopes that this would help curb her push for a hard Brexit.

Spreadex’s Connor Campbell said: “It’s not a formal vote on the issue, but it’s better than nothing, and has momentarily put to bed the fears of a hard exit from the EU, allowing sterling a chance to recapture some lost ground. Of course the pound is barely above $1.22 and €1.10, so it’s hardly a champagne-worthy rise. Nevertheless those traders that have been desperately fishing about for sterling’s bottom may be breathing a sigh of relief this morning.”

Oil prices were in the black, with West Texas Intermediate up 0.5% at $51.09 a barrel and Brent crude 0.7% higher at $52.80.

On the corporate front, shares in Swedish telecom equipment firm Ericsson tumbled after it warned on profit, saying third-quarter earnings will be “significantly lower” than expected amid falling sales in its core mobile-network equipment business. Peer Nokia also fell sharply.

In London, miner Fresnillo slipped back after a quarterly production report, while shares in Premier Foods tanked after it warned that first-half trading profit was likely to be slightly below the previous year and posted a drop in second-quarter sales due to warmer weather.

On the upside, chemical maker BASF advanced after it reported a smaller-than-expected drop in quarterly profit, while E.ON and RWE edged up following a report the German government has reached an agreement with the utility industry on nuclear decommissioning.

More broadly, investors will be keeping an eye on the third-quarter US earnings season, particularly after aluminium giant Alcoa kicked it off on a rather downbeat note on Tuesday, missing analysts’ expectations.

On the macroeconomic calendar, eurozone industrial production is at 1000 BST, while the latest FOMC minutes are at 1900 BST.