A choppy week for European stocks was set to end on a down note, with investors jittery over Russia-Ukraine tensions headed into the weekend, and poorly received earnings from Hermès and Allianz.
The Stoxx Europe 600 index
SXXP,
slipped 0.3% to 462.84, with a weekly loss hovering at 1.4%. The German DAX
DAX,
fell 0.9%, the French CAC 40
PX1,
was flat and the FTSE 100 index
UKX,
was also flat.
Investors were bracing for a long weekend and potential developments on Ukraine-Russia front. While hopes are building on a major diplomatic meeting due next week between U.S. and Russian officials, reports of more troop buildup near Ukraine caused jitters for global stocks.
German equities saw the biggest losses, due to a 3% drop for shares of Allianz
ALV,
which reported a fourth-quarter loss due to a 3.7 billion euro pre-tax provision for ahead of settlements “with major investors in the AllianzGI U.S. Structured Alpha funds and in light of current discussions with U.S. governmental authorities.”
Hermès International
RMS,
was another big decliner, with shares of the French luxury goods group down 6% after reaching a record operating margin in 2021, but analysts highlighting concerns over supply issues hitting 2021’s final quarter performance.
Hermès results also didn’t beat consensus such as seen from French groups LVMH Moët Hennessy Louis Vuitton
LVMH,
and Kering
KER,
which reported this week.
EDF
EDF,
stock tumbled nearly 3%. The French state-controlled utility reported a 2021 profit jump and a plan to strengthen its balance sheet after the government’s moves to curb electricity prices. But analysts were wary about the year ahead after such a difficult past year for the company.
“We would have expected another strong set of results in 2022 but the revision of its nuclear fleet availability and the French government’s measures to limit French consumers’ power bill will have a dramatic impact on EDF’s cash flow generation,” said Nadège Tillier, head of corporate credit research at ING, in a note to clients.
The French government reportedly announced Friday that it will provide around 2.1 billion euros ($2.39 billion) for the struggling utility.
This post was originally published on Market Watch
