European shares slide as Atlas Copco, Commerzbank fall
EUROPEAN stock markets dropped after some weaker-than-expected corporate updates, with mining equipment group Atlas Copco and Commerzbank among the hardest hit.
European equities were also impacted by weak U.S. consumer confidence data while Iran’s interception of a Marshall Islands-flagged cargo vessel added to market jitters.
Commerzbank fell 5.7 percent after the German bank launched a share sale to raise 1.4 billion euros ($1.5 billion) from institutional investors to bolster its capital.
Atlas Copco slumped around 9 percent after warning that demand for its mining equipment and large compressors had dropped further in the first quarter.
UPM-Kymmene also fell around 10 percent after its quarterly core profit missed expectations, making it and Atlas Copco the biggest losers in the pan-European FTSEurofirst 300 index.
The FTSEurofirst closed down 1.5 percent at 1,618.26 points, giving up gains made in the previous session.
The FTSEurofirst remains up 18 percent since the start of 2015. Economic stimulus measures from the European Central Bank (ECB) have pushed investors into the better returns available from stocks compared with bonds and cash, whose returns have been hit by record low interest rates.
But some traders said the advance may be starting to stall.
“We have seen some mixed earnings reports today, however disappointing results from companies such as UPM-Kymmene have eclipsed some positive results,” said Christian Stocker, equity strategist at UniCredit.
“The broader stock market’s recent uptrend remains intact, but we need to see a further improvement in company earnings for the trend to remain firmly in place in the coming weeks.”
Trading was also cautious ahead of the start of the Federal Reserve’s two-day policy meeting. Analysts expect recent soft U.S. data will nudge the U.S. central bank towards a dovish stance on monetary policy, while investors will scrutinise statements for hints about the timing of a rate hike.