Yahoo Finance European shares fall as earnings deluge disappoints
By Pranav Kashyap and Shashwat Chauhan
(Reuters) -European shares closed lower on Thursday as a slate of downbeat earnings reports in several sectors including tech and luxury weighed, while a global run for safe haven assets further exacerbated losses.
The pan-European STOXX 600 index closed 0.7% lower, though well off session lows, after hitting its lowest for over two months intraday.
Media shares declined 3%, the most among major STOXX 600 sectors, dragged by a 23.5% slide in Universal Music Group after the world's biggest music label reported lower-than-expected streaming and subscription revenue for the second quarter.
The tech sector lost 2.8%, with Dutch chipmaking parts supplier BE Semiconductor Industries (Besi) tumbling 14% after forecasting flat third-quarter sales, which fell below market expectations.
Paris-listed shares of STMicroelectronics dropped 13.7% after the chipmaker cut its full-year revenue and margins guidance for a second time.
Other industry heavyweights such as ASMI and ASML dropped about 4% each.
An extended selling frenzy of tech shares in U.S. further weighed on the sector. [.N]
Europe's automobile shares lost 1.7%, dragged by a 8.7% tumble in Stellantis after the carmaker delivered worse-than-expected first-half results.
Adding to the drag, Renault retreated 7.5% after alliance partner Nissan Motor slashed its full-year outlook after its first-quarter profit was almost completely wiped.
Nestle fell 5.1% after the world's biggest packaged food company lowered its sales outlook, while Kering lost 7.5% after the French luxury group reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half of the year.
A gauge of the 10 biggest European luxury firms fell about 1.7%, touching a six-month low.
Amid the global sell-off, investors fled to less risky assets, including short-dated bonds, with the yield on the German two-year bond at its lowest level since February. [MKTS/GLOB] [GVD/EUR]
"On the surface, the intense political climate seems to have caused a notable shift in the marketplace, moving from prominent tech stocks to cyclical, defence, and small caps," said Jeff O'Connor, head of market structure at Liquidnet.
On the bright side, UK's blue-chip FTSE 100 was an outlier, gaining 0.4% as index heavyweight Unilever gained 6.2% after beating first-half profit estimates.
Swiss contract drug manufacturer Lonza gained 7.1% after reporting a smaller-than-expected decline in first-half profit, while Sanofi jumped 4.2% after the French drugmaker raised its full-year profit outlook.
On the data front, a survey of around 9,000 managers showed German business morale unexpectedly fell in July amid increasing pessimism about the performance of Europe's largest economy.
(Reporting by Pranav Kashyap and Shashwat Chauhan in Bengaluru; Editing by Savio D'Souza, Mrigank Dhaniwala and Timothy Heritage)
