Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

European share rebound loses steam, steel stocks gain on US move

Published 02/19/2018, 05:12 AM
Updated 02/19/2018, 05:12 AM
© Reuters. The German share price index, DAX board, is seen at the stock exchange in Frankfurt

© Reuters. The German share price index, DAX board, is seen at the stock exchange in Frankfurt

By Danilo Masoni

MILAN (Reuters) - European shares dipped in choppy trade on Monday as a poor update from Reckitt Benckiser (L:RB) hit consumer staples, outweighing gains among financials and strength in steel makers after the U.S. outlined proposals for hefty import curbs.

Shares in Tenaris (MI:TENR), Outokumpu (HE:OUT1V) and Arcelor Mittal (AS:MT) - which have facilities in the United States - were the biggest gainers in Europe, up between 1.7 and 3.1 percent.

Their gains and strength in financial stocks helped STOXX 600 (STOXX) post small gains at the open but the pan-European benchmark index was later dragged lower by a fall in consumer staple stocks. The index was down 0.1 percent by 0930 GMT.

Monday's slight decline took place after the STOXX posted a 3.3 percent gain last week when strength of corporate updates and a return of inflows into equity funds helped global equities rebound from a turbulent start of the month.

The index needs to rise another six percent to climb back to the 2-1/2 year peak hit at the end of January.

Reckitt Benckiser (L:RB) missed profit expectations and its profit margins declined, hurt by a tougher pricing environment in developed markets and increased commodity costs. It said these issues would continue in the near term. [nL8N1Q910Z]

Reckitt Benckiser (L:RB), the maker of Durex condoms, Lysol disinfectant and Mucinex cold medicine, fell 5.4 percent. Shares in Unilever (L:ULVR), Diageo (L:DGE), Nestle (S:NESN) and Danone (PA:DANO) also declined.

Analyst at Investec affirmed their sell rating on Reckitt following the update, saying operating margin missed expectations and sales growth fell a little short of the more optimistic hopes given the strong flu performance from peers.

The U.S. Commerce Department has recommended that President Donald Trump impose steep curbs on steel and aluminum imports from China and other countries ranging from global and country-specific tariffs to broad import quotas. [nL2N1Q60V8]

Morgan Stanley (NYSE:MS) analysts said the European Commission could respond with measures to limit steel imports to the European Union, and that ArcelorMittal and SSAB (ST:SSABa) would benefit the most from rising U.S. spreads. SSAB rose 2.5 percent.

Banks (SX7P) were among the leading gainers, up 0.4 percent. The sector was supported by a 1.6 percent gain in shares of Deutsche Bank (DE:DBKGn) after analysts at BofA Merrill Lynch upgraded the German lender to neutral on optimism over investment banking trading revenues. [nL8N1Q911U]

German industrial giant Siemens (DE:SIEGn) rose one percent after announcing plans to list its healthcare division in the first half of the year.

© Reuters. The German share price index, DAX board, is seen at the stock exchange in Frankfurt

Mercedes maker Daimler (DE:DAIGn) was a weak spot, down 1.7 percent, after reports said U.S. investigators probing Daimler had found that its cars were equipped with software which may have help them to pass diesel emissions tests. [nL8N1Q8080]

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.