Equities extend losses after disappointing earnings results

Friday, April 11, 2014

European equity markets extended losses today, to end the week on the negative side as fairly disappointing corporate earnings results from the US weighed on market sentiment, despite the fairly optimistic economic data. The CAC, DAX, IBEX and the London benchmark index fell sharply between 1.2% and 1.47%, while the euro strengthened further against the US dollar, retesting the 1.39 level.

EUR Rally

EUR Curncy (Euro Spot )  Daily 11 2014-04-11 17-14-25

On the macroeconomic front, German CPI increased by 0.3% in March in line with expectations, while China’s CPI rose to 2.4% during the same period versus estimates of a 2.5% rise. The University of Michigan/Reuters survey was fairly optimistic after showing the US market sentiment increased to 82.6 in April, more than analysts’ expected, while the current market conditions surged to 97.1 in April compared to 95.7 in March.

LME Aluminium

LMAHDS03 Comdty (LME ALUMINUM  3 2014-04-11 17-14-05

In commodities, base metals prices were fairly mixed. LME aluminium gave back recent gains and slid lower toward $1880, while copper consolidated around $6670, looking for some direction.

In London, heavy losses in technological and industrial stocks dragged the index lower. Arm holdings and Sage Group retreated sharply by 4.5% and 2.1%, respectively. Furthermore, a disappointing earnings report from JP Morgan weighed on market sentiment for the UK banks. Lloyds and Barclays fell by 2.12% and 1.54%, respectively.

Next week, investor attention will turn to the release of Eurozone’s industrial production and US retail sales figures, which could provide a better insight for the current market conditions.

 

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