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Market Update

European Markets Extend 3-Day Losses, LVMH Soars 7%

Author: Lucy Stoeva
Last Update: 10:39 AM ET February 03 2016

4:00 PM Frankfurt, Germany - European stocks declined for the third day in a row on weak earnings reports from key companies. Finland controlled utility Fortum said adjusted operating profit tumbled 34%. Italian banks extended losses by as much as 8% on the rising non-performing loan portfolios.

European stocks declined for the third consecutive day on the weak earnings reports from leading companies.

In Helsinki, Finland state-controlled utility Fortum plummeted 11% after earnings were hurt by low power prices and write-downs.

Dutch telecom KPN also disappointed after sales dropped 10% and operating profit declined 8% on the weakness in enterprise segment.

In the financial sector, Italian banks were the worst performers due to the lingering insecurity over the rising bad debts.

Banca Monte dei Paschi di Siena fell 4.8%, Banco Popolare Societa Coooperativa plunged 7.4%, and Unione di Banche Italiane lost 5.8%.

In the U.K., the January services PMI was 55.6, little changed from December’s reading of 55.5 and in-line with the average over the second half of 2015, according to survey data from Markit and CIPS.

Growth was supported by inflows of new business and employment growth was at three-month high, Markit/CIPS said.

In London, FTSE 100 index fell 10.32, or 0.17%, to 5,911.69 and in Frankfurt, the DAX index declined 37.58, or 0.39%, to 9,543.46.

In Paris, the CAC 40 index was down 0.32, or 0.01%, to 4,283.67.

Fortum Oyj plunged 11.13% to €12.30 after the Finnish state-controlled utility said earnings in the fourth quarter were harmed by low power prices and write-downs.

Adjusted operating profit tumbled 34% to €243 million from the same period a year ago.

As a result, the company plans to cut fixed costs by €100 million by the end of 2017.

CEO Pekka Lundmark said the utility seeks acquisitions that would strengthen its position at home, in Europe, and in some parts of Asia.

The company proposed dividend of €1.10, below expectations set by analysts.

Hargreaves Lansdown Plc fell 3.4% to 1,273 pence despite reporting an increase in pretax profit of 6.1% to £108 million for the first half of its fiscal year.

Assets under administration increased 7% to £58.8 billion.

The financial services company increased its interim dividend by 7% to 7.8 pence.

KPN NV fell 1.07% to €3.41 after the core earnings of the largest Dutch telecom operator were below expectations due to weakness in the business customer segment.

Adjusted EBITDA or operating earnings from continuing operations fell 7.6% to €582 million compared to the same period a year ago.

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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