Europe open: Stocks hit by drop in ZEW index, warning from Apple
Unione Di Banche Italiane Spa
24.31p
16:30 24/11/17
Stocks fell across the Continent on the back of survey results and a company announcement from technology giant Apple reflecting the first direct impact of the China coronavirus, testing financial markets' resilience up until now.
Apple Inc.
$242.21
13:09 07/01/25
Dow Jones I.A.
42,528.36
04:30 15/10/20
Nasdaq 100
21,173.04
12:15 07/01/25
The ZEW institute's closely-followed gauge of investor sentiment for Germany missed the consensus forecast by a wide margin, in what one economist said was but the first instance of a trend as corporates took stock of the impact from the coronavirus.
On that note, overnight, Apple said it would not meet analysts' estimates for first quarter revenues amid a slow ramp-up post the Lunar New Year holidays in China due to the outbreak.
"This mind-set may well change in the coming days given last night’s unexpected revenue warning from Apple for the current quarter, which should act as a timely reminder, if any were needed to investors, that companies still need to meet their guidance forecasts," said David Madden at CMC Markets UK.
As of 1015 GMT, the Stoxx 600 was down 0.41% to 430.23, alongside a similar drop for the Cac-40 to 6,060.79, while the German Dax lost 0.66% to 13,693.15.
The FTSE Mibtel on the other hand was 0.47% higher to 25,239.60.
Buoying the Italian benchmark was a 22% surge in shares of Unione di Banche Italiane SpA following a bid by Intesa SanPaolo, with shares of the latter also tellingly higher.
Shares of HSBC announced plans to reduce its workforce by 35,000 and shrink its balance sheet by $100.0bn as part of a pullback in Europe and the US in the wake of a 53% drop in its fourth quarter profits.
The number of new coronavirus cases in the Chinese province of Hubei slipped to 1,807 on Tuesday and the global count increased to 72,436, with the number of deaths in that same region rising by 93 and the number globally to 1,868.
In economic news, the ZEW expectations index for Germany fell from 26.7 in January to 8.7 for February (consensus: 21.5).
A separate gauge for the Eurozone meanwhile weakened by 15.4 points to 10.4.
"The decline is much bigger than implied by the relatively resilient Sentix, though it’s fair to assume that respondents to this survey hadn’t had time to fully incorporate the risks," said Claus Vistesen at Pantheon Macroeconomics.
"They probably still haven’t in general [...]"