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European shares slide as Atlas Copco and Commerzbank fall
By Reuters
Published: 15:23 GMT, 28 April 2015 | Updated: 15:23 GMT,
28 April 2015
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LONDON, April 28 (Reuters) - European equities fell on Tuesday following some weaker-than-expected corporate updates, with mining equipment group Atlas Copco sliding after results while a new share issue hit Commerzbank.
Commerzbank dropped 5.4 percent after the German bank launched a share sale to raise 1.4 billion euros ($1.5 billion) from institutional investors to bolster its capital.
Atlas Copco slumped nearly 10 percent after warning that demand for its mining equipment and large compressors had dropped further in the first quarter.
UPM-Kymmene also fell around 10 percent after its quarterly core profit missed expectations, making it and Atlas Copco the biggest losers in the pan-European FTSEurofirst 300 index.
The FTSEurofirst was down 1.9 percent at 1,611.15 points going into the close of trading, giving up gains made in the previous session. The index was also hit by weak U.S.
consumer confidence data.
The FTSEurofirst remains up nearly 20 percent since the start of 2015, as economic stimulus measures from the European Central Bank (ECB) have pushed investors into the better returns available from stocks compared with bonds and cash, whose returns have been hit by record low interest rates.
MIXED EARNINGS
But some traders said the advance may be starting to stall.
"We have seen some mixed earnings reports today,
however disappointing results from companies such as UPM-Kymmene have eclipsed
some positive results," said Christian Stocker, equity strategist at UniCredit.
"The broader stock market's recent uptrend remains intact, but we
need to see a further improvement in company earnings for the trend to remain firmly in place in the coming weeks."
Trading was also cautious ahead of the start of the Federal Reserve's two-day policy meeting.
Analysts expect recent soft U.S. data will nudge the U.S. central bank towards a dovish stance on monetary policy, while investors will scrutinise statements for hints about the timing of a rate hike.
Geberit, which makes toilet flushing systems, dropped 5.8 percent after reporting a fall in first-quarter net profit.
Across Europe, Germany's DAX, which hit a record high this month, retreated 2.4 percent and France's CAC fell 2.3 percent.
Greece's ATG index extended the previous session's gains of 4.4 percent to rise 1.6 percent after Prime Minister Alexis Tsipras on Monday reshuffled his team handling talks with European and IMF lenders.
Nevertheless, some traders remained wary about Greece, and the risks that a lack of progress on finding solutions for Greece's debt problems could hit European stock markets.
"There is plenty of potential for downside here. I'd be looking to sell on rallies," said Berkeley Futures' associate director Richard Griffiths.
(Additional reporting by Sudip Kar-Gupta; Editing by Tom Heneghan and David Holmes)
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