EU States Agrees to Cut Gas Consumption, UBS Drops 10%

Bridgette Randall
26 Jul, 2022
New York City

European markets traded down ahead of the U.S. GDP data and interest rate decision. 

Stocks in Frankfurt edged lower after Russia controlled Gazprom throttled down natural gas flow to 20% of the capacity of Nord Stream 1 pipeline network. 

The widely anticipated move from Gazprom also lifted natural gas and crude oil prices in European trading. 

The European Union member states agreed to cut natural gas consumption by 15% for the next eight months beginning next month. 

Europe has been looking for alternative natural gas supplies from Norway, Algeria, Qatar, and the U.S. 

Russia supplies  about 40% of the natural gas consumption of the 27 member states of the European Union and alternative supplies from other nations can only provide less than 10% of Europe's needs. 

Moreover, alternative supplies will be delivered in a liquid form and Europe lacks LNG processing facilities at ports.   

The DAX index fell 0.8% to 13,102.31, the CAC-40 index declined 0.4% to 6,210.59, and the FTSE index was nearly unchanged 7,306.28. 

Lindt & Spruengli increased 107,825 Swiss francs after the chocolate maker released a stock repurchase plan of up to one billion swiss francs. 

For the full-year, the chocolate maker revised its sales growth outlook to between 8% and 10% from the previous estimate between 6% and 8%. 

Organic sales in the first half of 2022 ending in June increased 12.3% to 1.99 billion Swiss francs and operating profit rose 33.4% to 185.2 million Swiss francs.

Net income jumped 36.2% from a year ago to 138.4 million Swiss francs. 

UBS AG dropped 10.9% to $15.04 after the Swiss bank reported sharply lower-than-expected earnings in its latest quarter. 

Total revenues in the June quarter was essentially flat at $8.9 billion and net income edged slightly to $2.1 billion from $2.01 a year ago. 

Diluted earnings per share rose to 61 cents from 55 cents a year ago. 

Fee generating assets in its global wealth management unit, fee-generating assets decreased  by 12% or $169.5 billion to  $1,244 billion, almost entirely driven by market decline and foreign currency effects.