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Weak data weighs on European shares, bank stocks rise after results

Reuters  |  LONDON 

By Helen Reid

LONDON (Reuters) - European shares slipped on Tuesday after weak data from and added to a spate of less encouraging on the global economy, but the sector offered a ray of light after strong results from Austria's Raiffeisen

The pan-European index eased 0.1 percent while Germany's DAX declined 0.2 percent after Europe's biggest economy reported first-quarter growth slightly slower than expected.

The earnings season was nearing its close with more than three-quarters of MSCI companies having reported first-quarter results.

"Generally it's been slightly underwhelming on sales numbers and in line on earnings numbers," said Rory McPherson, at

"European banks have tended to perform quite well and have picked up a lot recently with some good earnings," he added.

Indeed, on Tuesday stocks led the way.

An 81 percent increase in first-quarter net profit sent Raiffeisen shares up, while led the DAX after reporting quarterly pre-tax profit ahead of analysts' expectations.

added to the optimism around stocks. The French bank's shares had fallen at the open but recovered to trade up 1.3 percent after quarterly profit fell short of expectations.

Italy's FTSE MIB, which is heavily weighted to the financial sector, rose 0.4 percent, outperforming European peers.

Italy's government-forming efforts hid a speedbump late on Monday as 5-Star and League parties won more time to decide on a

Dealmaking, which has been rife in European markets this year, continued with agreeing to buy the payments arm of Swiss SIX for $2.75 billion.

Shares in the French payments company jumped 4.8 percent, while Atos, which has a majority stake in Worldline, rose 2 percent.

Shares in Switzerland's jumped 4.5 percent. The firm was boosted by dealmaking in the sector and by its addition to MSCI's index, traders said.

Overall, price reaction to earnings numbers has been muted, analysts said, with earnings misses tending to have a more marked impact.

"You tend to need good guidance as well as beats to warrant good stock performance, which is to be expected nine years into a bull market," said Psigma's McPherson.

There was no shortage of fallers after results on Tuesday.

shares dropped 5 percent after the German group reported a surprise loss at its Industrial Solutions business.

Meanwhile shares sank 17 percent to the bottom of the after a management reshuffle and weak first-quarter results.

French firm also tumbled 8.7 percent after warning it could fall short of its full-year revenue target, and Danish maker fell 9.2 percent on lower than expected profit due to a slowdown in

(Reporting by Helen Reid; Editing by Julien Ponthus/Keith Weir)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 16:45 IST
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