The world’s stock markets tumbled yesterday on a wave of disappointing earnings reports, compounded by a weaker showing on Wall Street and a slump in Tokyo, traders said.
In London, shares in British luxury fashion giant Burberry slumped on disappointing earnings and a costly strategy overhaul.
The group’s share price tumbled 9.32% to £18, topping London’s fallers board.
“Burberry posted a 24-percent jump in first-half pre-tax profits, but it still missed expectations,” noted Madden.
“Traders were more interested in the company’s plans — which involves focusing more on the high end of the luxury goods market.
The stores they are retaining will be revamped at a high cost, and this is spooking traders.”
In Denmark, shares in Vestas, the world’s largest wind turbine manufacturer, tumbled nearly 20% after the Danish firm tweaked its annual outlook and its quarterly net profit slid.
By later afternoon, its shares were down 19.1% to 426.60 kroner (€57.33, $66.72), in a market down 2.8% overall.
London’s FTSE 100 dropped 0.6% to 7,484.10 points, Frankfurt’s DAX 30 fell 1.5% to 13,182.56 points, Paris’ CAC 40 slipped 1.2% to 5,407.75 points, while the EURO STOXX 50 shed 1.1% to 3,613.41 points at close.
Following declines in Asia and Europe earlier during the day, US stocks opened sharply lower, amid uncertainty over the fate of the US tax overhaul making its way through Congress.
“A sure sign of a market that has gotten overextended on a short-term basis is the palpable angst that arises from the sudden shift in tone,” said Briefing.com analyst, Patrick O’Hare.
The weaker showing on Wall Street put added pressure on main stocks indices in Frankfurt, Paris and London, which had already been in the red following the release of quarterly corporate earnings reports that fell short of expectations.
“Equity indices are lower, with the German DAX underperforming once again as disappointing earnings reports add to unwelcome euro strength,” said Accendo Markets analyst, Mike van Dulken.
In Asia, Japanese stocks had finished in the red, suffering a sharp reverse after earlier hitting fresh 26-year highs, while most other Asian indices also fell.
“Markets took their cue from a volatile session in Japan, where the Nikkei performed an impressive handbrake turn after hitting fresh multi-year highs,” said IG analyst Chris Beauchamp in London.
“This sudden drop after the relentless gains over the past two months caught investors on the hop.”
China and the United States meanwhile signed more than $250bn in business deals, including $37bn worth of Boeing planes, as US President Donald Trump held talks with Chinese counterpart Xi Jinping in Beijing.
A Burberry Group boutique at a department store in Moscow. The group’s share price tumbled 9.32% to u00a318 yesterday, topping London’s fallers board.
