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5/4/2016, 10:55 AM (Source: TeleTrader)
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European stocks fall as earnings weigh

While the dollar firmed moderately and the euro held relatively steady on Wednesday, equities in Europe kicked off the session fluctuating, but soon crossed into negative territory. The later part of the quarterly reports season is still bringing friction, with investors exiting positions after the release of unimpressive earnings and outlooks.

The FTSE 100 retreated 0.5% at 10:31 a.m. CET. BHP Billiton lost 7%, taking the mining sector sharply lower. The resources giant's venture in Brazil is being sued by prosecutors for damages of $44 billion for a dam disaster last year. Randgold followed with a loss of 6% parallel to a decline in the value of gold in the current session. Supermarket operator Sainsbury fell 4% after posting second yearly declines in a row, even though it held onto its market share. Shell went 0.7% to the red as it posted a significant fall in first quarter earnings due to low oil prices. Clothing retailer Next jumped 3.8%, trailed by Berkeley Group's gain of 1.9%. 

The DAX moved 0.43% to the red at 10:40 a.m. CET. Linde sunk 2.7%, adding the most weight, while Lufthansa was second in losses, with 1.9%. Deutsche Telekom shed 1.5% with concern about market potentials, after today it said profit in the three months through March jumped to €3.1 billion from €787 million a year before. HeidelbergCement and Beiersdorf rallied 2.7% and 1.8%, outperforming Siemens, which added 0.8% following an earnings report which showed a rise in sales by 5% after consolidation measures. Operating profit jumped 28% on the year in the company's second quarter, to €2.12 billion, though net income fell by almost two thirds.

The CAC 40 dropped 0.2% at 10:40 a.m. CET. Technip lost 3.8% and Veolia was second worst in performance, dropping 3.6%, as it revealed a fall in gross adjusted profit, but also weaker revenue. Société Générale jumped 3.8%, followedy by Legrand's advance of over 3%. Both companies reported firmer net income in the first quarter.

The euro lost 0.1% against the dollar and advanced 0.26% compared to the pound at 10:52 a.m. CET. The greenback's index rose 0.14% as the United States currency added 0.36% versus the pound and 0.28% against the yen. The pound also fell 0.23% compared to the franc.

 

Image: EPA / Marius Becker

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