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European shares fall amid disappointing bank earnings

Reuters | Updated: 15-05-2019 13:39 IST | Created: 15-05-2019 13:39 IST
European shares fall amid disappointing bank earnings
European shares fell on Wednesday after a rebound the day before as a softer tone from U.S. President Donald Trump calmed investor worries over worsening trade relations between China and the United States.

The pan-European STOXX 600 index fell 0.4% by 0743 GMT. Bank-heavy Italian and Spanish indices led the losses after some dour results from their lenders. On Tuesday, Trump called the trade dispute with China "a little squabble" and expressed optimism about reaching a deal. His comments helped markets recover from two-months lows after both side imposed duties on each other's imports.

Asian shares also found support as weak retail sales and industrial output data from China raised hopes for more stimulus from Beijing. Germany's DAX – the most sensitive European market to trade-war fears - dropped 0.4%, even though the latest data showed Europe's biggest economy returning to growth in the first quarter of 2019.

Autos, which were among the leading gainers on Tuesday, dropped 1.3%. Renault's shares fell about 3% after its Japanese partner, Nissan, issued a bleak earnings outlook. Volkswagen also fell about 3%.

Banks fell 0.9%, weighed down by disappointing results. Raiffeisen Bank International (RBI) and Dutch bank ABN Amro both missed profit expectations. French bank Credit Agricole's first-quarter net profits dropped after two one-off events offset gains in profitability at some of its businesses. Bucking the trend was British bank CYBG Plc, which jumped 6% to the top of STOXX 600 after posting a first-half profit.

LafargeHolcim's rose 1.3% as the world's largest cement maker posted a rise in operating profit. The IT services provider Cancom SE gained after confirming its full- year outlook. STMicroelectronics rose after Kepler Cheuvreux raised its price target. German publisher Axel Springer gained after JP Morgan upgraded its shares to "overweight" from "neutral".

A more than 5% drop in E.ON weighed on the energy company's shares and the utilities sector as Goldman Sachs downgraded its shares. Its shares also traded ex-divided. (Reporting by Medha Singh in Bengaluru, editing by Larry King)


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