European stocks sink as tech gloom spreads, Valeo plunges

  • Reuters
  • Stock Market News
European stocks sink as tech gloom spreads, Valeo plunges
Credit: © Reuters.

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LONDON, Oct 26 (Reuters) - European shares crumbled on Friday, tracking a decline in U.S. stock futures after tech stocks Alphabet (NASDAQ: GOOGL ) and Amazon (NASDAQ: AMZN ) missed results expectations, further sapping risk appetite as European earnings also disappointed with Valeo harshly punished.

The leading index of euro zone stocks .STOXX50E fell 1.5 percent with Germany's DAX .GDAXI down 1.7 percent and France's CAC 40 .FCHI down 1.8 percent.

Overall the third-quarter earnings season has been marred by rolling sell-offs across global markets and marked by sharp downgrades to earnings estimates.

Disappointing Amazon and Alphabet results reignited investors' anxieties about the overwhelming dominance of tech stocks - prized for seemingly unstoppable growth - in this market cycle. pan-European STOXX 600 was on track for its worst month since August 2015.

On the day earnings disappointments caused sharp falls.

Shares in French auto parts maker Valeo VLOF.PA sank more than 19 percent after its second profit warning in three months, flagging disruption from tougher European emissions tests and a sharp sales downturn in China. Faurecia EPED.PA also tumbled 9.2 percent after it announced an agreement to buy Japanese car navigation system maker Clarion from Hitachi. ALTT.PA shares surged 16 percent after the engineering and tech consultancy reported strong third-quarter results.

Swedish appliances maker Electrolux ELUXb.ST sank 13.5 percent after it trimmed its market demand expectations and forecast higher costs due to increasing raw material prices and tariffs. in French household appliances maker SEB SEBF.PA also fell 15.3 percent after its third-quarter sales figures. from banks were more mixed after more encouraging results from UBS had boosted it in the previous session.

Spain's Banco Sabadell SABE.MC topped the IBEX with a 5.5 percent gain after its third-quarter profit beat expectations.

Britain's RBS RBS.L meanwhile tumbled 4 percent after it warned of economic uncertainty and its profit lagged forecasts. The lender said it had taken a 100 million pound impairment provision to account for greater uncertainty.

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