Europe open: Stocks in the red as car makers slump

1st Aug 2024 08:16

(Sharecast News) - European stocks fell in early trade on Thursday, dragged lower by weak performances from the likes of BMW, Volkswagen and Societe Generale.

At 0915 BST, the benchmark Stoxx 600 index was down 0.4%, Germany's DAX was 1% weaker and France's CAC 40 was 1.2% lower.

The losses came despite a solid session on Wall Street overnight. On Wednesday, the US Federal Reserve left its benchmark rate at between 5.25% and 5.50% as expected. However, chair Jerome Powell indicated that the central bank would be prepared to loosen monetary policy at its next meeting if price pressures continue to ease.

"A reduction in the policy rate could be on the table as soon as the next meeting in September," Powell said. "We're getting closer to the point at which it'll be appropriate to reduce our policy rate, but we're not quite at that point."

As far as the Bank of England is concerned later in the day, expectations are for a 25 basis points cut to 5%, which would mark the first reduction since 2020.

In corporate news, BMW was under the cosh after the car maker posted a drop in second-quarter earnings, with Volkswagen and Daimler Truck also lower after results.

The Stoxx 600 autos and parts index was down 2.1% at 587.93.

Elsewhere, Societe Generale tumbled just over 7% after cutting the outlook for its French retail bank.

On the upside, drinks and brewing company AB InBev fizzed higher after its second-quarter profits beat expectations.

Shell gushed higher as the oil giant reported better-than-expected earnings for the second quarter of $6.3bn and announced a $3.5bn share buyback.

Rolls-Royce was also on the front foot as it lifted its full-year profit guidance, hailing a strong first half, and said it was reinstating dividends.