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European shares dip as Ingenico and Metrobank add to macro gloom

Published 23/01/2019, 10:01
© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt
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By Julien Ponthus

LONDON (Reuters) - European shares dipped on Wednesday morning as a new batch of corporate updates prompted fresh concerns, particularly on the tech sector, and added to worries about a global growth slowdown and Sino-U.S. trade negotiations.

At 0941 GMT, the STOXX 600 (STOXX) was down 0.1 percent, with most bourses across Europe losing ground and a number of steep individual falls at the open.

A profit warning by Ingenico (PA:INGC) sent the French payment group down over 12 percent to six-year lows and hit the whole European tech sector (SX8P), which retreated 0.9 percent.

Still in the sector, ASML Holding NV (AS:ASML), a major supplier to the world's largest computer chipmakers, fuelled concerns among investors as it warned that first-quarter sales would be weak, with some customers delaying orders into the second half of 2019.

A profit miss by Metro Bank (L:MTRO) triggered a spectacular 30 percent fall and gave no respite to a sector already weakened during the previous session by Swiss bank UBS's (S:UBSG) fourth-quarter earnings report.

The car making sector (SXAP) was sustaining the biggest losses on worries about trade negotiations between the Trump administration and the Chinese government ahead of high-level talks next week.

European retailers (SXRP), however, rose 0.5 percent to a seven-week high after supermarket groups Carrefour (PA:CARR) and Ahold Delhaize (AS:AD) posted trading updates and gained 7 percent and 2.9 percent respectively.

Europe's biggest plastics packaging maker, RPC Group (L:RPC), rose 4.6 percent after Apollo Global Management agreed to buy it for 3.3 billion pounds in cash after months of negotiations.

Doubts about global growth highlighted by the International Monetary Fund cutting its 2019 outlook continue to weigh on stock markets.

"Profits growth will clearly decelerate this year, and market expectations are probably still too high, but we don’t see a meaningful downturn developing any time soon", wrote Paul Quinsee, global head of equities at J.P. Morgan Asset Management.

© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

European companies listed on the STOXX 600 (STOXX) index are set to report an average 4.8 percent rise in earnings per share (EPS) in the fourth quarter, a decrease from the 6 percent expected last week, according to I/B/E/S Refinitiv.

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