Europe open: Stocks waver as investors sift through earnings
European stocks wavered in early trade as investors sifted through some corporate news, with updates from Burberry, ASML and Novozymes providing some cheer.
At 0850 GMT, the benchmark Stoxx Europe 600 index was down 0.1%, Germany’s DAX was up 0.1% and France’s CAC 40 was 0.3% lower. Meanwhile, oil prices edged higher, with West Texas Intermediate up 0.6% to $52.78 a barrel and Brent crude up 0.7% to $55.88.
Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, said: “Markets have taken a deep breath and appear to have calmed down for the moment, with European equities largely range bound in early trade. The dramatic move in sterling pushed the FTSE 100 sharply lower yesterday, but we are already seeing sterling give up some of those gains today, as the heat of the moment spike appears to have been overdone.
“Politics and currencies have replaced central banks as the key driver of markets, with Brexit and Donald Trump driving sentiment for investors and volatility rising. The big question for investors is whether the focus on short-term political moves is causing markets to overlook longer term trends and if this market is fair value at current levels.”
On the corporate front, Dutch semiconductor supplier ASML and Danish biotechnology group Novozymes both rallied after better-than-expected fourth-quarter reports.
Meanwhile, luxury retailer Burberry edged higher after it reported 4% growth in underlying retail sales for the third quarter, boosted by a return to growth for the Asia Pacific region but with the Americas still in decline.
On the downside, however, education publisher Pearson – which has already issued a string of profit warnings in recent years – tanked after it cut its profit forecast for this year and said the dividend will be lower.
Deutsche Bank ticked down after agreeing to pay a $7.2bn fine to the US Department of Justice for misleading investors in its sale of residential mortgage-backed securities in the run-up to the financial crisis.