European Markets Rebound from Morning Losses

Bridgette Randall
25 Jul, 2022
Frankfurt

European markets lacked direction in volatile trading as investors digest another batch of corporate earnings in the region. 

A private survey showed confidence in the business community dropped to the lowest level in the last 25 months. 

The business confidence index declined to 88.6 in July from a revised 92.2 in June.

Higher energy prices and uncertainties linked to the natural gas deliveries and rising wage pressures are worrying business leaders. 

The DAX index declined 0.3% to 13,210.46, the CAC-40 index inched up 0.3% to 6,237.55, and the FTSE 100 index increased 0.4% to 7,306.30. 

Volkswagen AG declined 3.9% to 183.0 euros after the automaker said that the chief executive Herbert Diess will be replaced by Oliver Blume, head of Porsche. 

In another management shake up, the company appointed chief financial officer Arno Antlitz as chief operating officer.

Under Diess, VW accelerated its investment and migration to electric vehicle production and in 2021 sold 450,000 units, surpassing Tesla sales in Europe. 

Schaeffler AG declined 1.2% to 5.52 euros and the German industrial products maker signed an agreement with an affiliate of Triton Fund V for the acquisition of the Ewellix Group for 582 million euros and assume debt of 120 million euros. 

In 2018, Triton acquired the linear actuators maker Ewellix Group from the Swedish bearings maker SKF. 

Philips AG declined 7.7% to 20.08 euros after the medical equipment and systems maker reported sharply lower-than-expected earnings. 

Revenues in the second quarter declined 1% or 7% on a comparable basis to 4.2 billion euros. 

In the quarter, the company swung to a net loss of 20 million euros from 153 million profit a year ago. 

Sales in Western Europe declined 6% to 873 million euros and in North America increased 11% to 1.7 billion euros. 

Telefonica S.A. increased 1.9% to 4.42 euros after the company agreed to sell its rural fiber network in Spain to a consortium for around 1 billion euros. 

Orange S.A. increased 1.5% to 10.27 euros after the French telecom operator agreed to merge its unit in Spain with MasMovil. 

The equally-owned joint venture values Orange's Spain business at 7.8 billion euros and Masmovil at 10.9 billion euros.  

 

China Worries Hobble Asian Markets 

Asian markets traded lower and indexes in China led the declines in the region after real estate and banking crises.deepen in China 

Investors also awaited the restructuring plan from the troubled China Evergrande Group. 

At least four smaller banks in Henan and three additional banks in Anhui are restricting customer withdrawals. 

Moreover, mortgage boycotts are spreading in central and southern China as investors await the fate of completion of 249 real estate projects reflecting over 1 million apartment units. 

The Shanghai Composite index fell 0.60% to 3,250.39 and the Hang Seng index in Hong Kong closed down 0.22% to 20,562.94.

In Tokyo, benchmark indexes lower ahead of the U.S. Fed's rate decision and the release of the U.S. GDP data later in the week

The Nikkei average fell 0.77% to 27,699.25 to snap a seven-day advance while the broader Topix index dropped 0.65% to 1,943.21.

The Sensex index in India declined 0.6% to 55,766.20 after the industrial, telecom, and retail conglomerate Reliance Industries reported a 40% surge in earnings on the back of a 65% jump in crude oil prices.

In addition, tech service companies Infosys and Tech Mahindra reported sharply lower-than-expected earnings in the latest quarter ending in June.