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Market Update

BHP Faces $44 B Legal Claim in Brazil, Air France and Soc Gen Fall on Earnings

Author: Lucy Stoeva
Last Update: 4:53 PM ET May 04 2016

4:00 PM Frankfurt, Germany - European stocks extended losses on Wednesday as mining stocks fell on weak copper prices. Brazil sued BHP Billiton for $44.5 billion. Dialog Semiconductor reported sharply lower operating profit. U.K. supermarkets feel the pressure of German discount retailers.

European stocks extended losses on Wednesday as mining stocks fell on weakening in copper prices and BHP Billiton’s troubles in Brazil,

Investors also noted the sharply lower profit announcement from Dialog Semiconductor reported and the U.K. supermarkets face rising competition from German discount retailers.

Mining stocks continued to decline as copper prices fell due to ongoing concerns about the economic slowdown in China, a major importer of base metals.

Shares of Anglo American plummeted 3.4%, Antofagasta lost 2.8%, and Glencore fell 3.2%.

BHP was the largest loser, down 5.8%, after prosecutors in Brazil filed a $43.5 billion civil suit over the dam failure last year.

Dialog Semiconductor plummeted 8.6% after the supplier for Apple and Samsung smartphones cut its revenue outlook and reported a sharp drop in profit.

Supermarket chains on the London Stock Exchange traded lower after a Kantar market survey indicated that the top four U.K. grocers continued to lose market share to German discount retailers
Aldi and Lidl.

Kantar monitors the household grocery purchase habits of 25,000 demographically representative households in the U.K.

Wm. Morrison Supermarkets stock lost 1.8% and Tesco plunged 5.4%. J Sainsbury, which reported earnings and cut its dividend, erased 6.3%.

The final data on April composite purchasing managers’ index for the euro zone was in-line with the flash reading at 53, Markit said.

The number represents a slight decline from the 53.1 March reading but is still above the 50 benchmark that separates contraction from expansion.

Eurostat reported that retail sales in the euro zone fell 0.5% in March from the previous month.

In London, the FTSE 100 index lost 79.18, or 1.28%, to 6,106.41, while in Frankfurt, the DAX index dropped 98.52, or 0.99%, to 9,828.25.

In Paris, the CAC 40 index fell 47.75, or 1.09%, to 4,324.23.

Air France-KLM erased 4.34% to €7.37 after the airline reported an operating loss of €99 million, an improvement from the loss of €266 million a year ago due to lower fuel costs.

However, the carrier warned of excess capacity and uncertain travel market after the recent terrorist attacks in Brussels in March.

Anheuser-Busch InBev SA/NV lost 1.6% to €106.45 after the brewer said unfavorable exchange rates dragged down net profit in the first-quarter.

BHP Billiton Plc tumbled 5.8% to 824.80 pence after Brazilian federal prosecutors filed a civil lawsuit for $43.55 billion for cleanup and remediation after the dam disaster in November last year.

Dialog Semiconductor Plc plummeted 8.6% to €27.25 after the chipmaker used in the smartphones of Apple and Samsung Electronics reported a sharp drop in first-quarter profit and revised down its revenue and gross margin outlook for the year.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc