European stocks struggled on Wednesday afternoon as investors weighed in on BMW AG earnings warning and a barrage of economic gloom in the region.
The Stoxx Europe 600 SXXP index,
slipped 0.1% to 334.87, after breaking a three-day losing streak on Tuesday with a gain of 2.1%, the largest since April 17. The German DAX 30 index,
down 0.2% and the French CAC 40 PX1 index,
The FTSE 100 UKX index,
managed to avoid losses elsewhere, with the pound falling 0.7% to $ 1.2350 after the IHS Markit UK Construction Purchasing Managers’ Index fell to 8.2 in April from 39.3 in March. Britain’s construction sector has suffered by far its biggest contraction since launching a widely followed industry survey 23 years ago, as the coronavirus lockdown closed construction sites and suppliers. The country’s tough economic backdrop comes as deaths in the UK have now surpassed those in Italy, making its death toll the highest in Europe.
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Investors continue to keep an eye on the fallout from the coronavirus and the progress of European countries and the United States in efforts to get economies back on their feet. Deaths in the UK have now exceeded those in Italy, making its death toll the highest in Europe.
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The European Union has predicted “a recession of historic proportions this year” due to the impact of the coronavirus with its first official estimates of pandemic damage. The region is expected to contract 7.5% this year, before growing around 6% in 2021. Germany reported a 15% drop in factory orders in March, the largest drop since the start of the series in January 1991.
Dow YM00 Futures,
were firmer, but gains declined after payroll processor ADP said 20.2 million private sector jobs were lost in April during the coronavirus pandemic. The coronavirus shutdowns have pushed jobless claims to 30 million, and Friday’s non-farm payroll data for April is expected to be one of the worst on record.
President Donald Trump said on Tuesday that the United States must push to revive the economy, even if it means more deaths from the epidemic.
Elsewhere, in response to a German court ruling that gave the European Central Bank three months to justify its public sector purchasing program, the ECB said it would continue to do whatever was necessary to revive the ‘inflation. The central bank added that the European Court of Justice ruled in December 2018 that it “was acting within the framework of its price stability mandate”.
Through the actions, the actions of BMW BMW,
fell 5% after the German automaker said it expected significantly lower profits in 2020, with the biggest impact coming from the coronavirus in the second quarter.
Shares of Royal Dutch Shell Group PLC RDS.A,
dropped by 4%, CL.1 oil prices,
ahead of US inventory data.
Shares of Novo Nordisk AS NOVO.B,
reversed a previous gain to decrease by 1%. The Danish company’s first-quarter results beat expectations as patients in the US and Europe stockpiled drugs amid the pandemic.
AstraZeneca PLC AZN shares,
rose 3% after the drugmaker said its treatment for heart failure, Farxiga, was approved by the U.S. Food and Drug Administration.
DLG from Dialog Semiconductor PLC,
Stocks jumped nearly 11% on Wednesday after the chipmaker reported first quarter 2020 results to the top of its forecast. The company expects underlying revenue for the second quarter to be between $ 260 million and $ 290 million, with an underlying gross margin expected to be “broadly in line” with the first quarter.
Dialog expects second-quarter revenue of $ 260-290 million, which is well above consensus forecast for underlying revenue of $ 245 million and estimates from Bryan Garnier of $ 264 million, said analyst Frédéric Yoboué.
Far from the main indices, the shares of Norwegian Air Shuttle NAS,
fell 12% after offering up to 571,428,571 new shares at a steep discount, aiming to raise 300 million to 400 million crowns ($ 29 million to $ 38 million). The airline is fighting to stay afloat during the pandemic and a near collapse in air traffic. The offer price is set at 1 crown, against 4.21 crown at which it was negotiated on Wednesday.