Europe open: Stocks edge lower; Volkswagen skids but Randgold shines

European stocks nudged lower in early trade as investors sifted through corporate earnings, with autos in focus amid news that Volkswagen was being sued by a German customer over its diesel-test cheating.

At 0850 GMT, the benchmark Stoxx Europe 600 was down 0.2%, Germany’s DAX was 0.6% lower and France’s CAC 40 was off 0.1%. Meanwhile, West Texas Intermediate was up 0.2% at $53.96 a barrel and Brent crude was 0.1% firmer at $56.89.

Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, said: “European markets have opened quietly after a frenetic few weeks. The first two weeks of the new Trump administration have seen significant sector fluctuations as the market comes to terms with new executive orders and public and corporate response. The future of Dodd-Frank and Obamacare have been key drivers for financials and pharmaceutical companies worldwide as the market reacts to reviews and reforms from President Trump.

“Now that the dust has settled somewhat, investors will be able to get back to stock fundamentals and corporate profits before the next round of European politics and Brexit start to make their mark.”

In corporate news, shares in Volkswagen fell after the beleaguered German car maker was sued by its first big German customer over its diesel-test cheating. This weighed on the broader sub-index for autos and parts, which dropped 0.9%.

Randgold Resources shone after it reported a 76% jump in fourth-quarter profit and hiked its annual dividend.

National Grid nudged higher after saying it will spend £35m to buy back up to 3.5m shares to reduce its share capital as part of its management of the dilution resulting from the take-up of its scrip dividend offer for the interim dividend paid in January 2017.

Budget carrier Ryanair flew lower as it reported a drop in third-quarter profit and sounded a cautious note on the outlook for 2017, although the company maintained its full-year profit guidance forecast.

Fellow airline easyJet was also in the red after it reported a rise in traffic and the load factor in January, but said the load factor on a 12-month rolling basis edged lower.

On the data front, investors were digesting figures showing German factory orders increased the most in two and a half years in December thanks to a rise in investment-goods demand.

Adjusted for seasonal swings and inflation, orders were up 5.2% from the previous month, when they declined a revised 3.6%. Economists had been expecting a much more modest 0.7% gain.

On the year, orders were up 8.1%.