home  › Markets

European shares end lower but Milan manages to stay afloat

by Flavia Carletti

European stock prices closed lower on Thursday, with only Milan bucking the trend, snapping a seven-day winning streak as they took a breather from recent gains amid weak global markets.

Investors digested a host of earnings reports from European companies, including Swiss food giant Nestle, Franco-Dutch air carrier Air France-KLM, French provider of energy management and automation solutions Schneider, French information technology group Capgemini, French television group TF1, French car components manufacturer Valeo and Dutch insurer NN Group.

Minutes from the European Central Bank were largely overlooked as the Frankfurt-based institution limited itself to affirming that there was a broad consensus in keeping policy accommodative.

Investors also digested growing prospects for a Federal Reserve rate hike in March after Fed Chair Janet Yellen indicated a possible interest rate hike at “upcoming meetings” of the central bank's policy committee. Upbeat US retail sales and consumer inflation data released yesterday also heightened expectations of a March interest rate hike. Yellen offered no fresh clues on the Fed's rate policy in her second day of testimony before Congress yesterday.

The London FTSE 100 closed down 0.34% at 7,277.92 points, the Frankfurt DAX lost 0.34% at 7,277.92 points, the Paris CAC 40 dropped 0.52% at 4,899.46 points, in Milan the FTSE MIB gained 0.16% at 19,087.54 points while in Madrid the IBEX 35 lost 0.43% at 9,542.70 points.

In the region's stock market dealings, weaker metal prices weighed on miners.
Oil majors also dropped, while banking stocks were mixed, halting a recent rally.
Air France-KLM gained 12.60% at €6.18 on better-than-expected earnings and helped lift carriers across the region.

Swiss food giant Nestle dipped 0.96% in Zurich stock market dealings after it said that net profit dropped and underlying sales rose less than expected last year.
Shares of Italian telecoms and energy cable manufacturer Prysmian sank 2.19% at €24.14 in Milan trade after the broker Equita downgraded its recommendation on the stock to 'hold' from a previous 'buy'

The Equita downgrade came after the stock gained some 27% since last April, reducing potential upside. Nonetheless, analysts at Equita still anticipate growing margins and predict Prysmian's EBITDA will rise to €749 million in 2017 from an estimated €707 million in 2016.