European stocks fell the most in a week, extending losses in the final half hour of trading, as companies including LVMH Moet Hennessy Louis Vuitton SA and Statoil ASA posted earnings that missed forecasts.
LVMH fell the most since August 2011 after the world’s largest luxury-goods company said demand weakened in Asia.
Air France-KLM Group climbed 2.6 percent after reporting second-quarter profit that beat estimates. Sky Deutschland AG added 1.4 percent after British Sky Broadcasting Group PLC offered to buy the German broadcaster. Royal Bank of Scotland Group PLC rallied the most in more than four years after saying first-half profit almost doubled.
The STOXX Europe 600 Index slid 0.7 percent to 341.95 at the close of trading. The equity gauge has gained 0.7 percent this week, as companies from Danske Bank A/S to Actelion Ltd raised their annual earnings projections.
“Retail is hitting sentiment,” said Michael Woischneck at Lampe Asset Management in Dusseldorf. “I was quite surprised by LVMH and didn’t see that profit miss coming, but we’re still not that far into the earnings season and this week has been fine, with quite a few companies reporting very good numbers. Banks are holding up quite well.”
German consumer confidence is forecast to increase next month to its highest level since December 2006, according to GfK SE, a Nuremberg-based market researcher.
A separate report from the Ifo institute showed business confidence in Europe’s largest economy slipped this month more than economists had forecast, for its third straight monthly decline.
National benchmark indices declined in 13 of the 18 western-European markets. France’s CAC 40 slid 1.8 percent, Germany’s DAX slipped 1.5 percent and the UK’s FTSE 100 fell 0.4 percent.
LVMH lost 6.8 percent to 131.65 euros after saying first-half profit from recurring operations fell 5 percent to 2.58 billion euros (US$3.47 billion). Analysts had predicted 2.76 billion euros.
Asian demand weakened in the second quarter, led by slower Chinese spending, LVMH chief financial officer Jean-Jacques Guiony said on a conference call. He also cited political unrest in Hong Kong and the sales tax in Japan, while the disappearance of a Malaysian passenger jet affected sales in Singapore and Thailand.
Christian Dior SA dropped 6.3 percent to 136.65 euros, Kering lost 4.9 percent to 151.50 euros and Cie. Financiere Richemont SA declined 2.3 percent to 88.20 Swiss francs.
A gauge of personal and household goods companies posted the third-worst performance of the 19 industries on the STOXX 600.
Statoil fell 2.5 percent to 184 kroner. Norway’s biggest energy company said adjusted earnings after tax dropped to 9.9 billion kroner (US$1.6 billion) in the second quarter from 11.3 billion kroner a year earlier. That missed the 10.9 billion krone average of estimates compiled by Bloomberg.
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