Europe open: Stocks open lower on mixed earnings

25th Oct 2024 08:44

(Sharecast News) - Europe's Stoxx 600 opened lower on Friday morning, rounding off the week with its fourth loss in five sessions amid ongoing macro and political uncertainty.

The Stoxx 600 was down 0.2% by 0939 CEST, with most major benchmarks across the continent trading with mild losses. The index now sits 1.4% lower on the week after hitting a four-week high last Friday.

"As the week comes to an end, yields are thankfully lower, relieving some of the tension that has been plaguing stocks and enabling the battered yen and euro to restore some stability in relation to the dollar," said Patrick Munnelly, partner of market strategy at Tickmill Group.

"However, with risk events swirling over the horizon next week - including mega-cap results from five of the 'Magnificent 7'; a highly crucial US payrolls data on Friday; and the final lap leading up to a potential photo-finish US presidential election on 5 November - this relative quiet feels like the eye of the storm."

Economic data was relatively thin on the ground on Friday, with the German IFO sentiment gauge the only major release. The Business climate index improved to 86.5 this month from 85.4 in September, beating the 85.6 consensus forecast, as both assessments of current conditions and future expectations rose.

Earnings mixed

Mercedes-Benz was in reverse after the German car and truck maker reported a third-quarter net profit of €1.72bn, down from €3.72bn a year earlier and well below the €1.93bn expected by the market. Car margins sank to just 4.7% from 12.4% the year before on the back of softer pricing and weaker sales of higher-margin models.

Also lower was Remy Cointreau after the French drinks group cut its full-year revenue forecast following a 16% plunge in fiscal second-quarter sales to €317m, missing analysts' estimates. The company blamed weak conditions in China and poor demand in the US.

In London, NatWest jumped 5% after raising its full-year income forecasts after a strong third quarter in which profits jumped 35%. The banking group said it now expects to achieve a return on tangible equity above 15%, up one percentage point on previous guidance, while adjusted income should come in at £14.4bn, compared with an earlier forecast of £14bn.

Elsewhere, French pharma giant Sanofi impressed with its third-quarter profits, while Italian energy group Eni was subdued after cutting its earnings guidance for the year.