European Shares Fall as Ukraine Crisis Hits Local Earnings

European stocks fell at the open on Wednesday, hit by heavy losses on Wall Street and as results from local blue chips such as brewer Carlsberg and French bank Societe Generale showed the Ukraine crisis was starting to hurt large western companies.

At 0714 GMT, the pan-European FTSEurofirst 300 index was down 0.3 percent at 1,339.57 points. It mirrored a selloff on Wall Street, where Twitter led a rout in tech stocks with a 17.8 percent tumble after the expiration of a six-month “lock-up” period.

In a sign of the direct impact of the Ukraine crisis on European companies, France’s No. 2 listed bank Societe Generale booked a 525 million euro ($731 million) writedown on the value of its Russian unit Rosbank blaming heightened uncertainty and a decline in the Russian rouble. Its shares fell 2 percent.

Danish brewer Carlsberg, one of Europe’s blue-chips with the highest exposure to Russia, fell 2.2 percent as it partly blamed currency volatility in Russia for a fall in its first-quarter operating profit. The group also lowered its full-year net profit guidance.

“Overall these warnings had to be expected and there will likely to be more of them,” Markus Huber, a senior sales trader at Peregrine & Black, said.

“It will be important to see if other sectors will start warning too especially car manufacturers for whom Russia is a very important market.”

Source: Reuters