Europe midday: Heavy falls in Paris and Milan weigh on markets

21st May 2024 11:15

(Sharecast News) - Europe's Stoxx 600 index declined on Tuesday as heavy falls in Paris and Milan weighed heavily on markets on a relatively quiet day for traders.

The pan-European index was down 0.46% at 521.46 by around 1300 CEST, with investors continuing to trade cautiously following last Wednesday's all-time closing high of 524.71. The benchmark has traded within a tight range of less than four points or so since 10 May.

The Cac 40 in Paris was down 1%, with just four stocks trading in positive territory, with heavy falls in the financial and luxury sectors providing a drag. Meanwhile, Milan's FTSE MIB was 1.1% lower, as underwhelming results from insurance giant Generali weighed on financial stocks.

"European markets are in the red today, with concerns over the pathway to lower rates denting sentiment after a period of relative optimism," said Joshua Mahony, chief market analyst at Scope Markets. "In a week that looks to be dominated by central bank appearances, the cautious approach taken by the Fed members Bostic and Mester did little to lift expectations over the September cut currently priced in by the markets," he said.

Nervousness ahead Wednesday's quarterly results from Nvidia - the American chip manufacturer that has driven much of the market's recent gains on the back of rising demand for its AI offering - was also contributing to a reduction in risk appetite across global markets, according to analysts.

Tuesday was another quiet day in terms of economic data, eurozone construction figures and German producer prices the only major releases. Things will pick up later in the week, with inflation figures due out from the UK on Wednesday and PMI surveys from the UK, eurozone and US all due on Thursday.

Construction output in the eurozone rose by just 0.1% month-on-month across the single-currency region in March, after a revised 0.4% increase in February, revised down from the initial estimate of 1.8%. German wholesale prices fell at an annual rate of 3.3% last month, after a 2.9% decline in March, lower than the consensus forecast for a year-on-year fall of 3.2%.

Market movers

French financial stocks were mostly lower, with Societe Generale, BNP Paribas and Credit Agricole falling sharply, along with luxury groups Pernod Ricard and Kering.

Italian insurance and asset management provider Assicurazioni Generali declined in Milan despite beating forecasts with its first-quarter results, as adjusted net profits fell a less-than-expected 9%. Sector peer Banca Mediolanum was also firmly lower.

AstraZeneca gained in London after unveiling medium-term growth targets to nearly double group revenues by the end of the decade as it predicts significant growth from existing oncology, biopharmaceuticals and rare disease portfolios. The pharma giant said it expects to total revenues to hit $80bn by 2030, compared with $45.8bn in 2023.

German carmakers BMW and VW were both in reverse on a report from the Senate Finance Committee that claimed the companies used a supplier that has links to forced labour in China.

Greencore Group's share price surged after the UK convenience food manufacturer reported a huge jump in first-half profits and launched a share buyback programme as it guided to full-year earnings ahead of market forecasts.