European shares on Friday slipped as mining and oil stocks sold off and weak results from Thyssenkrupp AG and Compagnie Financiere Richemont SA weighed on sentiment.
The pan-European STOXX 600 fell 1.56 points, or 0.4 percent, to 365.52, but held on to a small gain of 0.4 percent for the week, its second in the black after a harsh sell-off last month.
The end-week slide in Europe joined a global market retreat after the US Federal Reserve appeared to remain on track to raise its key interest rate next month and warned the growth of business investment had dipped.
“Just as the feel-good factor was beginning to return to the markets, buoyed by the result of the US midterms, the Fed swooped in and brought everyone back down to earth,” Oanda Corp senior market analyst Craig Erlam said in a note.
Disappointing corporate earnings in Europe weighed on the market on Friday, as Germany’s Thyssenkrupp fell 9.2 percent to its lowest levels since July 2016 after cutting its profit outlook for the second time this year.
“A second guidance cut in as many quarters will further weaken confidence that Thyssenkrupp has the quality of assets that merit a higher multiple, while continued poor free cash flow is unlikely to give assurance that balance sheet risks are behind it,” Jefferies Group LLC analysts wrote.
Thyssenkrupp helped drag down the basic resources sector, which fell 3.4 percent as metals sold off.
The energy sector also acted as a drag, down 1.4 percent with oil majors weighing on indices, as rising supply and concerns of an economic slowdown pressured prices.
French oil storage and distribution group Rubis SCA led losers with an 11 percent fall after a disappointing trading update, with brokers lowering their recommendation for the stock.
Another blow for investors was luxury goods group Richemont, whose shares fell 6.4 percent after it said sales growth slowed and management struck a cautious note.
The sales numbers were negatively affected by moves to combat the gray market and efforts by the Chinese government to discourage consumers from spending overseas.
The results knocked Swiss peer Swatch Ltd, which fell 5.1 percent, and French luxury group Kering SA, the worst performer on the Paris CAC 40 with a 3.5 percent decline. Italy’s Moncler SpA also fell 3.6 percent.
Italian state-controlled defense group Leonardo SpA was another big loser, tumbling 8.9 percent after a disappointing trading update.
Italian shipbuilder Fincantieri SpA also sank 15.7 percent, its worst day ever, after its results.
Europe’s banking sector also fell sharply, with Banco Bilbao Vizcaya Argentaria SA (BBVA) the worst-performing. Shares in the Spanish lender tumbled 5.9 percent in the fallout from an unexpected bill in Mexico proposing to limit bank commissions, which triggered the stock market’s biggest fall in more than seven years on Thursday.
Santander Group SA fell 1.6 percent and Banco de Sabadell SA was down 2.2 percent, but BBVA suffered the biggest tumble as Mexico is its biggest market, accounting for 41 percent of the bank’s overall profits.
Shares in Danish bioscience company Chr Hansen A/S suffered their worst day since June, falling 6.3 percent, after major shareholder Novo Holdings A/S sold 4.85 million shares at an about 9 percent discount to Thursday’s closing price.
With disappointing earnings frustrating investors’ hopes for a results-driven boost to sentiment on European stocks, Emerging Portfolio Fund Research Inc data showed that outflows of US$2.6 billion from the region this week.
Additional reporting by staff writer
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