(Reuters) – European stocks fell for a third straight session on Wednesday, as losses in health care and construction stocks thwarted an encouraging rise in profits from consumer giant Nestle and telecoms supplier Ericsson.
The pan-European STOXX 600 .STOXX fell 1.3% to close at its lowest level in more than two weeks.[.N]
The losses were widespread with only the basic materials sector .SXPP in the green, supported by rising copper prices. [MET/L]
Nestle NESN.S raised its sales forecast for 2020 after a quarterly beat, but stocks edged down after the early gains.
Ericsson from Sweden ERICb.ST jumped 9.6% as rising margins and the rollout of 5G in China helped the company beat baseline quarterly profit estimates.
“Profits have generally been well above expectations and the outlook has been a positive surprise,” said Patrick Moonen, senior strategist in the multi-asset team at NN Investment Partners.
“But there are other things that are currently in play that may have a bigger impact on market performance than profits,” he said, noting that many European countries are reimposing mobility restrictions as a result. to a surge in COVID-19 cases that could weigh on the fourth. quarterly economic activity.
The STOXX 600 has struggled to break out of a trading range since June, when it recovered much of the initial losses from the pandemic. The benchmark is still around 16% below its all-time high.
Capital Economics expects the new containment measures to cause the eurozone economy to stagnate over the next six months, resulting in only a slight increase in GDP on a quarterly basis in the fourth quarter. quarter and zero growth in the first quarter of next year.
The FTSE 100, heavy with London exporters .FTSE underperformed, marking its worst session in a month, hit by a surge in the pound after bullish comments on Brexit. [.L]
Vivendi VIV.PA rose 1.6% after the French media group reported larger-than-expected quarterly revenue and unveiled plans to list its top-selling asset, Universal Music Group, in 2022.
Third-quarter profits for the STOXX 600 companies are expected to fall 34.8%, according to data from Refinitiv, a slight improvement from the 36.7% forecast at the start of the earnings season.
Of the 29 companies that have reported so far, 75.9% have exceeded earnings expectations.
Centamin Plc Gold Miner CEY.L fell 19% to the low of STOXX 600 after cutting its production forecast for 2020.
Construction companies have also taken a hit, with Assa Abloy ASSAb.ST, the world’s largest locksmith, down 4.1% after reporting lower quarterly sales.
Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Lisa Shumaker