Europe Markets

Europe ends lower as commodities fall; Hugo Boss tanks 19.8%


A sharp decline in oil and metal prices dragged European equities into the red Tuesday, as investors digested the latest set of earnings and data.

The pan-European Stoxx 600 index closed around session lows, finishing 1.2 percent lower, with almost all sectors ending in the red.

Europe's main bourses all under-performed, with London's FTSE 100 slipping 1.25 percent on the back of a fall in mining stocks. Meanwhile France's CAC was off 1.4 percent and Germany's DAX slumped 1.6 percent.

Oil in focus

Lower oil prices — which have been at the forefront of investors' minds this year — had set the tone for the day. Despite earlier gains, crude prices came under pressure during Europe's session as doubts circulated as to whether a potential production freeze would really have an impact on the supply glut.

U.S. crude tanked as much as 5 percent around Europe's close, trading at $31.70 after Saudi Arabia's oil minister, Ali Al-Naimi ruled out any possibility of a cut in production. International benchmark Brent crude also slumped over 4 percent, last standing around $33.16, despite reaching above $34 in earlier trade.

Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) Abdalla Salem El-Badri.
El-Badri: OPEC willing to work with non-OPEC producers

OPEC Secretary General Abdalla Salem El-Badri told CNBC on Monday that oil producers are still "feeling the water" over a possible deal to freeze production, and it is "wait and see" as to whether it leads to any other type of deal.

The oil and gas sector closed over 2 percent lower, with BP and Royal Dutch Shell slipping 3 percent or more, while Total finished 2.5 percent down.

Consequently, this tumble in energy prices and worse-than-expected consumer confidence data, caused U.S. markets to trading deep into the red. Asia's major indexes also closed mostly lower.

Weak German data

Stocks in Germany were hit by the latest business climate survey from the Ifo Institute which showed that morale fell in February. Utilities E.ON and RWE sat at the bottom of the benchmark, both ending sharply lower, down more than 4 and 5 percent respectively.

In business news, BHP slashed its dividend by 75 percent as the global miner posted its first loss in more than 16 years on Tuesday, reporting a net loss of $5.67 billion for the first half of the 2016 financial year.

Shares of BHP Billiton were among the worst performers on the Stoxx 600 index, closing 6 percent lower. BHP's news on top of a sharp slip in metal prices caused other mining stocks to fall, including Antofagasta and ArcelorMittal, both off more than 4 percent. Anglo American slipped 6.3 percent, while the sector was the worst performer, closing over 3 percent down.

Angela Merkel (L) talks with French President Francois Hollande after their bilateral meeting during a Eurozone emergency summit on Greece in Brussels, Belgium, June 22, 2015.
Fragile euro set for a political pounding

Danone shares were up 4 percent by Europe's close after the French food group reported like-for-like sales growth of between 3 and 5 percent, Reuters reported.

Luxury retailer, Hugo Boss tanked around Europe's close, after the German fashion house said it was bringing prices in Asia down, closer to the levels seen in the Americas and Europe, after weaker than expected sales; Reuters reported. Shares closed at the bottom of Europe benchmarks, off almost 20 percent.

Shares in Deutsche Boerse spiked 6 percent before closing over 3 percent higher, after news emerged that it was taking a fresh run at a merger with the London Stock Exchange (LSE), to create a large European exchange operator. LSE shares soared over 13.5 percent after the firm confirmed it was holding detailed discussions on an all-share merger under a new holding company.

Standard Chartered falls

Meanwhile, Swiss Re posted a 31 percent rise in 2015 net income and announced that Chief Executive Michel Lies would retire and be replaced by the head of its reinsurance business on July 1. Shares of the reinsurer finished down some 3.7 percent.

Homebuilder Persimmon saw its share price rise 2.8 percent after reporting a strong rise in pretax profit.

Standard Chartered, the U.K-based reported an 84 percent drop in pre-tax underlying profit, sending shares over 6.5 percent lower.

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