European stocks slide with eyes on U.S. tech earnings – Metro US

European stocks slide with eyes on U.S. tech earnings

German share price index DAX graph is pictured at the
German share price index DAX graph is pictured at the stock exchange in Frankfurt

By Anisha Sircar and Susan Mathew

(Reuters) -European shares extended losses for a third session on Tuesday, giving up earlier gains as technology stocks followed U.S. peers into the red ahead of earnings from some big names, while London’s FTSE outperformed on a commodities boost.

The pan-Europe STOXX 600 index closed lower, with technology stocks down 2.3% at six-week lows and banks dropping 2.3%.

The index had rallied up to 1% earlier in the day, cheered by strong earnings from companies including Swiss bank UBS and shipping giant Maersk. This followed a 2% plunge on Monday on worries of an economic slowdown in China and rapid U.S. interest rate hikes.

“Investors are back to fretting about economic growth, returning to the theme that dominated at the end of last week,” said Chris Beauchamp, chief market analyst at online trading platform IG.

“Meanwhile… nerves about big tech earnings this week have come to the fore.”

The tech-heavy Nasdaq slumped more than 2%, with Alphabet Inc and Microsoft Corp falling more than 2% each ahead of their results after the closing bell. [.N]

Capping broader losses in Europe, miners rose 1.1% recovering a sliver of Monday’s 6% plunge, while energy stocks gained 0.9%. [O/R]

This kept the FTSE 100 buoyed amid a continued rout for Germany’s DAX and Spain’s IBEX which lost more than 1%.

Among banks, HSBC fell 5.5% after Europe’s biggest bank warned more share buybacks were unlikely this year.

Spain’s Santander gained 6.2% after quarterly profit beat forecasts. Credit Suisse Group, Barclays, and Deutsche Bank are among other European banks set to report over the next few days.

At the bottom of the STOXX 600 was Swedish medical equipment maker Getinge which plunged 15.2% after reporting a larger-than-expected drop in quarterly profit.

Shares in French car parts supplier Faurecia slid 10.7%, dragging down the auto index, with analysts pointing to worse-than-expected guidance issued by Forvia, the group born from its takeover of German rival Hella. Faurecia also said it plans to review its activities.

Meanwhile, investor focus was on the U.S. Federal Reserve meeting next week and comments from European Central Bank officials. The ECB should raise rates soon and has room for up to three hikes this year, ECB policymaker Martins Kazaks told Reuters.

Money markets are pricing in more than 80 basis points of ECB interest rate rises by the year-end. [IRPR]

(Reporting by Anisha Sircar in Bengaluru; Editing by Shounak Dasgupta and Bernadette Baum)

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