By Johann M Cherian
(Reuters) -European stocks edged lower on Thursday as traders gauged mixed earnings from blue-chip companies such as Nestle and Deutsche Bank, while big M&A news in the mining sector powered Britain’s FTSE 100 to fresh peaks.
The pan-European STOXX 600 index was down 0.1%, as of 0857 GMT, dented by losses in food and beverage and industrial goods sectors.
Weighing on the food and beverage sector, Nestle dropped 3.4% after the world’s biggest packaged food company missed estimates for first-quarter organic sales growth.
Technology stocks also came under pressure, down 0.3%, following an underwhelming revenue outlook from U.S. social media giant Meta Platforms overnight.
Shares of Deutsche Bank slipped 0.6% while BNP Paribas climbed 0.7% after the euro zone’s biggest lenders posted upbeat first-quarter profits.
“It is early days yet for the earnings season overall, and markets are in some kind of short-term weakness, and the combination of earnings, interest rate worries and even the possible return of geopolitical worries should just make life a bit more difficult for the indexes,” said Chris Beauchamp, chief market analyst at IG Group.
Earnings in the first quarter are expected to decrease 12.1% from a year-ago period, according to LSEG data on Tuesday.
After signs of recovery earlier in the week, the main STOXX 600 index hit a patch of volatility as investors assessed the impact record-high interest rates have had on corporate performance in the previous quarter, while staying confident of an interest rate cut by the European Central Bank in June.
Meanwhile, ECB’ Isabel Schnabel said the final stage of getting euro zone inflation back to 2% will be bumpy and an erosion in productivity, along with high services costs, posing some of the biggest risks.
The benchmark index in Spain rose 0.4% after Prime Minister Pedro Sanchez said he would briefly step back from public duties to decide if he wants to continue leading the government after a court launched a business corruption probe into his wife’s private dealings.
Among other companies, Sanofi rose 4.1% after the French drugmaker posted upbeat quarterly results, while Germany’s online takeaway food company Delivery Hero climbed 6% after lifting its annual revenue outlook.
Shares of Adyen slumped 12% to the bottom of the benchmark index after the Dutch digital payment company missed expectations on first-quarter sales. Swedish telecom operator Telia slid 9.3% after quarterly core earnings narrowly missed expectations
Elsewhere, Britain’s FTSE 100 gained 0.7% to touch a record high as miner Anglo American surged on a buyout offer from global miner BHP Group. [.L]
(Reporting by Johann M Cherian and Sruthi Shankar in Bengaluru; Editing by Mrigank Dhaniwala and Sherry Jacob-Phillips)
