4:00 PM Frankfurt, Germany - European stocks declined on Tuesday after banks reported weaker-than-expected earnings while mining companies retreated on lower metal prices. Commerzbank said net dropped 52%. UBS said first-quarter profit sharply fell due to weakness in wealth management. HSBC posted a decline in profits.
European stocks declined on Tuesday as weak earnings reports hit the banking sector, while mining companies retreated on lower metal prices.
In Germany, Commerzbank lost 9% after posting a decline of 52% in first-quarter profit due to the low interest rates and the volatile capital markets.
HSBC, the largest bank in Europe, fell 1.4% despite the bank reporting a smaller-than-expected decline in profit and the bank announced 1,000 job cuts worldwide.
In Switzerland, UBS sank 7.8% after the first-quarter profit sharply fell to 707 million Swiss francs from almost 2 billion francs a year ago, mainly due to weakness in its wealth management unit.
In France, BNP Paribas eased 0.2% after the biggest French bank said net income rose 10%, despite the unfavorable environment and a revenue drop of 2%.
Base metal prices fell after Chinese factory output contracted for the 14th month in a row in April.
Anglo American stock plummeted 12.8%, Antofagasta lost 7.8%, BHP Billiton erased 6.2%, and Glencore fell 8%.
Among the few gainers, Solvay jumped 3.7% after reporting better-than-expected first-quarter results, as cost cuts offset the lower prices.
In London, the FTSE 100 index lost 49.10, or 0.79%, to 6,192.79, while in Frankfurt, the export-oriented DAX index dropped 181.84, or 1.80%, to 9,941.43.
In Paris, the CAC 40 index fell 62.78, or 1.41%, to 4,379.97.
tumbled 4.6% to €77.89 after the luxury auto maker warned of its full-year outlook and said the company faced difficulties in halting declining sales in the U.S. while dealing with uncertainties in China and Europe.
BMW said quarterly net profit increased 8.2% to €1.64 billion despite 0.3% decline in revenues to €20.85 billion from the same period a year ago. Vehicle sales increased 6% in the quarter.
BNP Paribas SA
shed 0.2% to €45.85 after the largest French bank said net income rose 10% to €1.8 billion from a year ago on revenue drop of 2% to €10.8 billion.
Last month the bank announced restructuring of its investment banking business and announced 650 job cuts.
lost 9% to €7.36 after the German bank posted a decline of 52% in first-quarter profit due to the low rate environment and the volatility of the capital markets.
Revenue before loan-loss provisions declined to €2.3 billion from €2.8 billion a year ago.
On the positive side, the quality of loans improved and loan-loss provisions declined to €148 million from €158 million a year ago.
Deutsche Lufthansa AG
sank 5.5% to €12.98 after the German airline said it may cut its capacity expansion plan and restructure its air-cargo unit to offset lower prices.
Lufthansa cut full-year capacity growth to 6% from 6.6% and the airline would consider additional downsizing, including suspension of some routes.
The airline posted a loss before interest and taxes of €53 million for the three months ended March 31, while revenue declined 0.8% to €6.9 billion from a year ago.