EUROPE MARKETS: European Markets Drop As SocGen Warns On Q4 Revenues
January 17 2019 - 8:30AM
Dow Jones News
By Emily Horton
European indexes were in the red on Thursday, as French bank
Société Générale SA announced it expected its fourth-quarter
capital markets revenues to fall by around 20%.
In the U.K., Prime Minister Theresa May has survived a
no-confidence vote, freeing her to start cross-party discussions on
finding a way forward on Brexit.
What are markets doing?
All major European indexes were down on Thursday, with the Stoxx
Europe 600 dropping by 0.3% to 349.53, after ending up 0.5% on
Wednesday.
Germany's DAX (DAX) lost 0.5% to 10,877.02, Italy's FTSE MIB
dropped by 0.1% to 19,450.11 and France's CAC 40 was down by 0.6%
to 4,780.14. The U.K.'s FTSE 100 lost 0.7% to 6,814.35.
The euro rose slightly to $1.1397 from $1.1393 late Wednesday in
New York, while the British pound rose to $1.2913 from $1.2878.
What is driving the market?
Banks were driving down stocks after Société Générale SA warned
that its fourth quarter was affected by a challenging environment
in global capital market
(http://www.marketwatch.com/story/societe-generale-4q-hit-by-challenging-environment-2019-01-17)s
(http://www.marketwatch.com/story/societe-generale-4q-hit-by-challenging-environment-2019-01-17).
The French bank expects revenue in this business to fall by around
20% in the fourth quarter and by 10% for 2018.
In the U.K., May is hoping to find a parliamentary consensus on
Brexit that she can take back to Brussels for renegotiation, after
her previous withdrawal agreement was roundly dismissed by
politicians earlier in the week.
But the PM is likely to stick to the core outline of her failed
deal, a strategy that Michael Hewson, chief market analyst at CMC
Markets U.K., compared to "trying to resurrect a corpse".
In the U.S., House Speaker Nancy Pelosi has urged President
Donald Trump to delay his State of the Union address. Pelosi said
that because of the current government shutdown, unfunded security
agencies are ill-equipped to protect the government during the
speech, The Wall Street Journal reports
(https://www.wsj.com/articles/pelosi-asks-trump-to-delay-state-of-the-union-11547650192).
Which stocks were active?
French bank Société Générale (GLE.FR) lost 5% after its poor
revenue predictions. BNP Paribas SA (BNP.FR) fell close to 4% and
Deutsche Bank AG (DBK.XE) (DBK.XE) fell over 3%.
Austrian listed Voestalpine AG was down by nearly 6%, after the
company cut its guidance for the 2019 financial year
(http://www.marketwatch.com/story/voestalpine-cuts-fy19-view-after-weak-results-2019-01-17).
Auto stocks were also under pressure, with Germany's Volkswagen
AG (VOW.XE) down by nearly 2%.
Software company Sage Group PLC (SGE.LN) led the European
gainers, jumping 6%, as strong revenues
(http://www.marketwatch.com/story/sage-group-revenue-up-76-backs-guidance-2019-01-17)
pushed its stock up. Experian PLC (EXPN.LN) added 1% on the news
its revenues were up 9%
(http://www.marketwatch.com/story/experian-organic-revenue-up-9-2019-01-17),
while Associated British Foods PLC (ABF.LN) gained 5%.
(END) Dow Jones Newswires
January 17, 2019 09:15 ET (14:15 GMT)
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