FRANKFURT: European stocks finished in negative territory on Tuesday with major benchmarks dragged lower by the autos industry.
The pan-European STOXX 600 closed flat, down narrowly by 0.1 percent provisionally, after trading higher for most of the session. Major indexes traded in different directions with the FTSE 100 ending narrowly higher and the German DAX drifting lower.
An HSBC note out Tuesday afternoon cut the autos industry to an “underweight” from a “neutral”. Stocks like Peugeot and BMW came under heavy pressure and damped sentiment across the region.
Shares of Italy’s Fiat Chrysler finished 6.6 percent lower after Exane BNP Paribas downgraded the stock to “underperform”. Volkswagen was also in the red after Citigroup cut its price target for the stock.
European markets had initially followed the lead set by markets in Asia, with the FTSEurofirst 300 index hitting a two-week high in the morning session. U.S. stocks traded lower on Tuesday, meanwhile, weighed by a reversal in oil prices.
Mining stocks bucked the trend, helped along by a tick-up in commodities. Anglo American shares closed up over 3 percent while BHP Billiton and Glencore were also in positive territory.
On the earnings front, Vodafone reported core earnings of 11.6 billion pounds for the year ended 31 March 2016, up 2.7 percent year-on-year. The telecoms operator said it expects this growth to accelerate in 2017, sending shares higher.
French telecoms company Iliad saw revenues rise 6.6 percent year-on-year in the first quarter, sending shares higher.
In the pharmaceutical sector, Swiss pesticides group Syngenta announced that the offer period for ChemChina’s takeover bid had been extended as it was waiting for some outstanding regulatory approvals. Shares of the Swiss company were down 0.8 percent by the end of the session.
Meanwhile, U.K. housebuilder Taylor Wimpey was one of the best performers after it announced a special dividend for investors following a positive trading update. And Premier Foods reported a rise in fourth-quarter sales.
Italian banks reversed earlier gains despite some positive news from the sector after Italy’s national statistics institute said the country’s economy will grow by 1.1 percent this year, a cut in its earlier 1.4 percent forecast.
Unicredit shares rallied earlier in the day after newspaper Il Sole 24 Ore reported that the bank’s top shareholders met to discuss a possible replacement for chief executive Federico Ghizzoni. But shares finished lower by nearly 2 percent.
Banco Popolare and Banca Popolare di Milano said they would cut 1,800 jobs and close 335 branches before 2020 after they merge later this year. Shares of both banks finished lower.
