Europe Movers: Bellway, Deutsche Post, Ericsson, Lonza Group, Luxury Stocks, Rolls-Royce

Inga Muller
17 Oct, 2023
Frankfurt

European markets edged lower and trimmed gains in the year-to-date on the worries of economic slowdown and interest rate uncertainties and a rebound in inflation. 

The DAX index decreased 0.2% to 15,216.43, the CAC-40 index fell 0.02% to 7,020.40 and the FTSE 100 index added 0.3% to 7,654.36.

The yield on 10-year German bonds increased to 2.80%, French bonds traded higher to 3.43%, the UK gilts edged down to 4.48% and Italian bonds eased to 4.81%.

Luxury stocks in Paris and Switzerland edged down ahead of the release of the key economic data in China. 

Hermes International, LVMH, Kering SA and Richemont declined between 0.3% and 1.5%. 

China is scheduled to release third quarter GDP, retail sales and industrial output data later in the week.  

Rolls-Royce Holdings PLC increased 0.6% to 214.90 pence after the UK-based aviation and defense contractor said it plans to eliminate 2,500 jobs. 

Bellway Plc inched up 1% to 2,184.0 pence after the UK-based home builder estimated new home sales in the fiscal 2024 to drop as much as 31% citing elevated home prices and a surge in interest rates. 

Lonza Group AG plunged 10.5% to CHF 383.60 after the Swiss product development services provider to pharmaceutical and nutrition companies issued an earnings warning citing the recent loss of business from Moderna. 

LM Ericsson Class B dropped 8.6% to Skr 49.30 after the Swedish telecom equipment maker reported a decline in third quarter revenue. 

Sales in the quarter decreased 5% to 64.5 billion kronor from 68 billion kronor and net income swung to a loss of 30.6 billion kronor from a profit of 5.2 billion kronor and diluted earnings per share was (9.21 kronor) compared to 1.56 kronor a year ago.  

The quarterly results were hurt by the one-time goodwill impairment charge  of 31.9 billion kronor linked to the acquisition of the U.S.-based Vonage Holdings Corp in July 2022 for $6.2 billion.

The company forecasted weak market conditions are likely to persist in the fourth quarter citing sharp fall in sales in the U.S. after companies delay network equipment deployment. 

Deutsche Post AG declined 1.4% to €38.48 and the Germany logistics company's subsidiary DHL said it plans to invest €350 million over the next five years in Southeast Asia to expand its workforce and warehousing capacity.