PARIS: European shares stumbled on Thursday, weighed down by a string of disappointing corporate earnings, while a global tech stock rout sent jittery investors scrambling for safer havens.
The pan-European STOXX 600 index fell 1.4% to a more-than-two-month low as of 0834 GMT, and was set for the worst day in over three months, if losses hold. Media shares declined 4.3%, the most among sectors, dragged by a 26.7% loss in Universal Music Group after the company reported a slowdown in its subscription and streaming segment in the second quarter.
The tech sector lost 2.6%, triggered by a sell-off in US tech stocks overnight that sent the Nasdaq tumbling nearly 4% in its worst single-day decline since 2022. Investors fled to less risky assets, including short-dated bonds, with the German two-yield at the lowest since February.
“There’s a knee jerk reaction to safer haven trades. We’re seeing bonds firm up, especially at the short end of the yield curve,” said Ben Laidler, head of equity strategy at Bradesco BBI.
“The global contagion from the US tech sell-off is affecting everything, however the tech sell-off is just a here and now thing. In the long term, earnings ultimately end up being much more important.”
Europe’s automobile shares lost 2.3%, dragged by a 8% tumble in Stellantis after the carmaker delivered worse-than-expected first-half results. Adding to the drag, Renault retreated 8.8% after alliance partner Nissan Motor slashed its full-year outlook after its first-quarter profit was almost completely wiped.
Nestle fell 4.7% after the KitKat maker reported half-year sales growth below analysts’ forecast and lowered its full-year organic sales growth outlook.
Kering lost 7.6% after the French luxury group reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half of the year. The luxury sector lost 2%, touching a six-month low. Keeping losses at check, Unilever gained 5.1% after beating first-half profit estimates.
Roche Holding rose 2.4% after the Swiss company lifted its 2024 profit guidance and beat first-half profit estimates. Investors await US inflation numbers due later in the day.