European shares down
European shares dipped on Tuesday as investors punished companies like Zalando and Pandora that missed expectations, while caution prevailed ahead of U.S. mid-term elections.
The pan-European STOXX 600 dipped 0.1 percent while the euro zone’s leading index fell 0.3 percent. While politics dented Italian stocks, company results dominated the wider market, with some poor showings hitting shares.
Zalando shares tumbled 7.4 percent after Europe’s biggest onlineonly fashion retailer reported its slowest rate of sales growth since it was launched a decade ago, and recorded a loss due in part to unseasonably warm weather.
Many companies this earnings season have flagged a squeeze on margins from rising commodity and wage costs. Worries over Italy’s budget also weighed, and Italy’s FTSE MIB lagged, down 0.8 percent.
Bank stocks fell 1.4 percent as government bond yields rose after euro zone finance ministers called on Italy to change its budget at a Eurogroup meeting on Monday. Euro zone business growth slumped to a two-year low in October as growing trade tensions and tariffs, alongside rising political uncertainty, put a dent in exports and optimism, the euro zone PMI services survey for October showed.
Overall earnings expectations are holding firm despite weaker economic data.
Asian stock markets were mixed in early trading Tuesday, as investors awaited the U.S. midterm elections. Japan’s Nikkei rose about 1% after Monday’s pullback, with drug and consumer-goods makers strong. Also, while denouncing the killing of Saudi journalist Jamal Khashoggi, SoftBank Chief Executive Masayoshi Son said his company’s massive investment fund will continue to do business with Saudi Arabia.
Chinese stocks fell, with the Shenzhen Composite, where many smaller-cap firms are listed, dropping 1.6%. The Shanghai Composite, meanwhile, declined 1% after snapping a four-day winning streak on Monday. One bright spot was the so-called technology-innovation sector, following word of tax breaks.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.