UPDATE 1-Sliding car stocks drag Europe down as investors hit the brakes

  • Reuters
  • Stock Market News
UPDATE 1-Sliding car stocks drag Europe down as investors hit the brakes
Credit: © Reuters.

* STOXX 600 stalls

* Auto shares skid 0.6 pct after Schaeffler warning

* Brenntag jumps after results, Prysmian tumbles 5.3 pct

* ING still under pressure after money laundering report (Updates prices, adds quotes, graphic)

By Helen Reid

LONDON, March 6 (Reuters) - European shares stalled on Wednesday as weak results from the troubled autos sector dragged the market down and investors' confidence in a rally that has sent stocks shooting up this year showed signs of fraying.

Exuberance in Chinese shares over hopes for fresh stimulus failed to spill over into European trading where the STOXX 600 .STOXX hovered near five-month highs, flat on the day.

"The good news is China is now easing quite aggressively. The less good news is it takes time for credit easing impact the domestic and global economies," said Nicholas Brooks, head of economic and investment research at Intermediate Capital Group.

"We think Europe will see growth pick up in the latter part of 2019 as China import demand stabilises and recent exceptional domestic factors weighing on Europe growth start to fade."

Auto stocks fell after German bearings maker Schaeffler SHA_p.DE warned of an "extremely challenging" business environment in 2019 and said it would restructure, sending its shares down 10.8 percent. midpoint of the new guidance implies 17 percent consensus earnings (EBIT) downgrades, and the 2020 guidance elimination will likely hurt sentiment," said UBS analysts.

The sector index .SXAP fell 1.3 percent as German carmakers Daimler DAIGn.DE , BMW BMWG.DE , and Volkswagen VOWG_p.DE tumbled, dragging the DAX down 0.2 percent.

Traders said the stocks were also hurt by an article in Handelsblatt saying the European Commission is preparing fines on German carmakers in an ongoing antitrust investigation. https:// shares, facing a potent cocktail of slowing global growth and rising trade tariffs, have been under pressure for months.

French car suppliers Faurecia EPED.PA and Valeo VLOF.PA also fell 1.4 to 2.9 percent while small-cap Swiss autos supplier Autoneum AUTON.S fell 9.3 percent after reporting a drop in profitability. from the tech sector were more encouraging.

Logitech LOGN.S shares rose 1.4 percent to a four-month high after the chipmaker said it expects annual sales to increase by mid to high single-digit in the next financial year ending March 2020.

"Delivering on its medium term targets is not fully reflected in shares yet," UBS analysts said.

Dialog Semiconductor DLGS.DE shares jumped 8.6 percent after the Anglo-German chip designer said revenue would suffer a single-digit percentage drop this year as it reduces its exposure to Apple (NASDAQ: AAPL ), above analysts' consensus view. Prysmian PRY.MI , the world's largest cable maker, fell 7 percent after its results were deemed a "mixed bag" by analysts and Kepler Cheuvreux downgraded the stock to "hold" from "buy".

The company revised upwards its savings expectations from a U.S. acquisition to offset provisions it has taken on its WesternLink cable connection. results, Dutch bank ING INGA.AS tumbled 4.5 percent in its second day of losses after a report on money laundering.

Also among top movers, British American Tobacco (JO: SNHJ ) BATS.L and Imperial Brands IMB.L rose 3.5 and 1.4 percent respectively as investors bet the surprise resignation of U.S. Food & Drug Administration Commissioner Scott Gottlieb may call into question the agency's regulation of e-cigarettes. after sharp cuts to analysts' forecasts, earnings for MSCI Europe companies are now expected to grow 5.7 percent in 2019 - down from the 9.5 percent growth expected four months ago.

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