Traders work at the Frankfurt Stock Exchange. The DAX closed down 1.94% at 9,407.48 points yesterday.
AFP/London
European stocks tumbled yesterday as investors digested a barrage of results, with Frankfurt sliding after German sportswear giant Adidas issued a profit warning linked to the crisis in Ukraine.
Investor sentiment remained cautious on the eve of the crucial US non-farm payrolls data, which is a major indicator of the health of the world’s biggest economy.
European stock markets slumped, with Frankfurt’s main DAX index diving 1.94% to 9,407.48 points by the close of trading.
London’s benchmark FTSE 100 index shed 0.64% to 6,730.11 points, while in Paris the CAC 40 tumbled 1.53% to 4,246.14 points.
Lisbon stocks fell 3.12%, driven by what was at one point a 45-percent nosedive in shares of stricken Portuguese bank Banco Espirito Santo (BES), which posted a record first-half loss of €3.57bn (nearly $4.8bn) late on Wednesday.
Markets on Wall Street opened sharply down following news of Argentina’s debt default, a rise in jobless claims and disappointing earnings.
Oil prices extended recent losses as concerns eased that the Ukraine crisis would have an immediate impact on global crude supplies, analysts said.
US benchmark West Texas Intermediate (WTI) for September delivery slipped 95 cents to $99.32 a barrel.
Brent crude for September was down 71 cents at $105.80 in late London trading.
The European single currency meanwhile eased to $1.3385 from $1.3395 late in New York on Wednesday.
Europe’s main equity indices fell on concerns that tougher sanctions against Russia could hurt the region’s economy despite news of a sharp rebound in US economic growth.
Investor sentiment in Germany—a key exporter of goods to Russia—has taken a blow.
Adidas shares plunged 15.37% to €59.41, topping the DAX fallers board on Thursday, after warning that the Ukraine crisis and Western tensions with Russia, one of its key markets, would weigh on its business.
Adidas also slashed its annual net profit forecast to about €650mn ($870mn). That was much lower than previous guidance for between €830-€930mn.
“German stocks were the worst hit... which is hardly surprising given the amount of trade the country conducts with Russia,” said analyst Craig Erlam at traders Alpari.
“When you see profit warnings like these from such a large company, it really makes you realise exactly what these countries are losing every time a fresh batch of sanctions are imposed on Russia.”
In London, Britain’s state-rescued Lloyds Banking Group saw its share price slide 2.83% to 74.25 pence after posting a 57% drop in first-half net profits.
Earnings after taxation dived to £665mn ($1.125bn, €840mn) in the six months to June, hit by compensation for insurance mis-selling and fines over Libor rate rigging.
London’s top gainer was energy major Royal Dutch Shell, whose ‘B’ share price rallied 2.67% to 2,555.50 pence after revealing that net profits more than tripled in the second quarter, boosted by asset sales and higher oil prices.
Earnings after taxation soared by 206% to $5.307bn (€3.961bn) in the three months to June compared with the same part of 2013.
In Paris, international supermarket group Carrefour said that default by Argentina would cause it to slow investment in the country.
Asian markets traded mixed after US data showing the world’s top economy grew much more than expected in the second quarter was offset by late profit-taking.
Tokyo stocks declined 0.16% and Seoul lost 0.31%, while Sydney added 0.18%, Shanghai jumped 0.93% and Hong Kong gained 0.10%.
