|
Dire warnings hit bourses
|
 |
October 28, 1998: 5:30 a.m. ET
Earnings reports are mixed but forecasts drag down stocks
|
LONDON (CNNfn) - Europe's bourses appear ready for a more testing day Wednesday as a weakening dollar and some poor earnings dented sentiment.
Losses on Wall Street and in Tokyo overnight dampened the enthusiasm which Europe thrived on Tuesday.
Fears that Brazil may be forced to devalue its currency weighed on the dollar, and it eased against both the yen and the mark.
It's earnings season in Europe, and in general the figures announced Wednesday were below the markets' expectations.
In early trade London's FTSE 100 slipped 1 percent or 60 points, to 5,271.0.
Frankfurt's electronically traded Xetra DAX lost more than 2 percent, almost 100 points, to 4,586.58.
In Paris the CAC 40 slid 1.8 percent, 67 points, to 3,483.9.
Zurich's SMI lost 1 percent, 72 points, to 6,377.3.
The U.K.'s second-largest grocer, J.Sainsbury, reported 18 percent growth in first-half earnings, in line with analysts' forecasts. But it warned that same store sales in the past three weeks grew only 2 percent.
Sainsbury shares tumbled more than 6 percent, dragging down the rest of the sector. Shares in Tesco, Asda and Safeway all fell substantially.
Brewer and restaurant operator Whitbread also highlighted poor sentiment among U.K. consumers. Despite unveiling half-year profits on a continuing basis that grew 5 percent, Whitbread management warned that trading conditions remain tough. The shares fell more than 4 percent.
In Germany it's the banking season. Hypo-Vereinsbank kicked off the reporting period by revealing a 10 percent jump in operating profit. It's stock tumbled nearly 10 percent though, when it announced substantial provisions for its real estate exposure in the former East Germany.
Former state-owned telecoms group Deutsche Telekom reported a 31 percent surge in third-quarter income, but that couldn't relieve the recent pressure on the shares. They slipped 2 percent.
French telecoms equipment supplier Alcatel warned that conditions are still tough, as it posted a tiny decline in third-quarter revenues. Its stock was one of the few to post a rise, albeit a small one, in early Paris trading.
In Switzerland, the weaker dollar hurt the industrial groups which rely on exports for a large part of their earnings.
In Amsterdam the focus was on chemical giant Akzo Nobel. Third-quarter earnings released Wednesday were below forecasts, and the shares tumbled almost 9 percent.
Baan shares were also in the spotlight. The software group's stock has collapsed in recent weeks, and it announced it is delaying its third-quarter profits announcement from Wednesday to Thursday. No reason was given.
Spain, and particularly the banking sector, reacted badly to growing signs of crisis in Brazil. The IBEX index slipped almost 2 percent.
|
|
|
|
|
 |
|
