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Asian Markets at Close Report

European Markets at Close Report

Aug 10, 2016

European Markets Closing Report, by CNBC on August 10, 2016

cnbc.com

Oil decline drives European markets to close under pressure; Novozymes tanks 11.5%

Arjun Kharpal, Alexandra Gibbs, Holly Ellyatt

European stocks failed to finish on a positive note on Wednesday as the renewed decline in oil prices and a slew of corporate earnings curbed investor sentiment.
 
FTSE FTSE 6852.72 1.42 0.02% 456311520
DAX DAX 10657.10 -35.80 -0.33% 77368279
CAC CAC 4452.02 -16.05 -0.36% 50602391
IBEX 35 IBEX 35 Idx 8663.80 -1.60 -0.02% 129413090
The pan-European STOXX 600 came off session lows, to close 0.26 percent down provisionally. Sectors ended mostly lower, however insurance and banks bucked the broader downward trend to close slightly up.
The U.K.'s FTSE 100 held onto minor gains by the close, popping 0.1 percent, while France's CAC and Germany's DAX slipped 0.35 and 0.3 percent respectively.
U.S. markets followed a similar trend, trading mostly lower around Europe's close as quarterly results from retail firms and persistent weakness in the oil price took center stage.

Central banks, oil prices shake up markets

While earnings season continued to drive several individual stocks and sectors during trade, oil prices and central bank decisions also kept the market on its toes during Wednesday's session.
On the oil front, crude futures fluctuated during trade on Wednesday, with prices surrendering gains after U.S. Energy Information Administration reported that U.S. commercial crude inventories had risen to a total of 523.6 million for the week ended Aug 5, an increase of 1.1 million barrels. Gasoline stockpiles however fell some 2.8 million barrels.
Elsewhere, OPEC upgraded its forecast for oil demand growth in 2016 on Wednesday, in a report that may dampen hopes for a production freeze after the group meets next month. Brent crude and U.S. WTI fluctuated between losses and gains following the EIA news, trading around $45.10 and $42.75.

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The Bank of England was also in focus on Wednesday, after it failed to meets it bond-buying target in its revived asset-buying program. The bank fell £52 million short of its target to buy £1.17 billion of gilts on Tuesday, the second-day of the revived program. During trade, the British pound came off its highs, to trade roughly flat against the U.S. dollar, hovering at $1.3004.

Also on investors' minds was the likelihood of an imminent rate hike by the Fed, after U.S. second-quarter productivity unexpectedly fell by 0.5 percent. Economists polled by Reuters expected a gain of 0.4 percent.

Novozymes tumbles, as insurance outperforms

Earnings continued to move shift market sentiment on Wednesday. The STOXX 600's biggest loser of the day was Denmark's Novozymes, down some 11.5 percent. This comes after the biotech firm cut its outlook for full-year organic sales growth after it reported earnings before interest and tax (EBIT) that missed analyst expectations.
And Germany's E.ON also underwhelmed, down over 7 percent after it posted a more than 3 billion euro ($3.3 billion) loss in the first half of 2016 compared to a 1.15 billion euro profit a year earlier thanks to charges related to its power plant unit Uniper. The sharp fall dragged other stocks from utilities including RWE and EDF.
Regus tumbled over 5 percent after Numis cut its rating on the stock from "buy" to "hold". Meanwhile, Rolls Royce shares got a 3.5 percent boost after Morgan Stanley raised it to "equal-weight", from "underweight".
Meanwhile, British security firm G4S rallied 16 percent after it posted an 8.2 percent year-on-year rise in first-half core earnings. And recruitment firm Adecco jumped 2.5 percent, after it posted a 7 percent rise in net profit for the second quarter.
The insurance sector was a bright spot helped by positive earnings. Belgian firm Ageas was near the top of the STOXX 600, up 4.5 percent, after a rise in profits in its insurance business and as it announced a 250 million euro share buy-back program.
Legal & General shares bounced back on Wednesday after falling on Tuesday following disappointing earnings. This despite Barclays cutting its price target for the stock. Shares popped over 3 percent.
And Prudential reported a six percent rise in first-half operating profit that beat analyst expectations, helping push its shares up over 2 percent.