European stocks inch lower as oil prices drop
European stocks traded lower Tuesday as investors trod carefully amid a decline in oil prices and ongoing geopolitical tensions, despite U.S. markets closing at all-time highs on Monday.
The pan-European STOXX 600 was down 0.78 percent.
The lower European open comes as concerns over a crude and refined fuel glut outweighed an expected cut in U.S. shale production and a probable further draw in U.S. crude inventories, Reuters reported.
Crude prices fell more than 1 percent in the previous session after worries about potential supply disruptions stemming from an attempted coup in Turkey proved unfounded.
Meanwhile in Asia, markets were mixed in morning trade on Tuesday, with shares of internet and telecommunication giant SoftBank tumbling some 10 percent as investors reacted to the company’s announcement on Monday that it had agreed to acquire British semiconductor firmARM Holdings in a deal worth $32 billion. Shares of ARM rallied over 46 percent in European trade on Monday and closed up 40.9 percent.
SoftBank’s chairman and chief executive, Masayoshi Son, said the decision to acquire ARM was not motivated by a weaker pound following the Brexit vote but was about taking advantage of the “paradigm shift” seen in the Internet of Things (IoT) technology.
Earnings in focus
In business news, pharmaceutical company Novartis reported second quarter sales of $12.47 billion and core operating income of $3.33 billion, versus a Reuters poll average of $3.21 billion. Shares of Novartis were flat.
Shares of paintmaker AkzoNobel were sharply lower after it reported second quarter earnings on Tuesday and said it had seen “continued volume growth with improved profitability” but that revenue had fallen 6 percent to 3.7 billion euros, “adversely affected by currencies.”
Meanwhile, Swedish telecoms equipment maker Ericsson was trading flat after it reported a fall in second-quarter sales and operating profit and said it was to intensify cost-cutting activities in the face of a weaker mobile broadband market.
Truck maker Volvo reported a fall in second-quarter net profit amid a drop in sales of its trucks and construction equipment, with shares trading lower.
In the U.K., Royal Mail reported a 1 percent rise in revenue for the for the three months ended 26 June 2016, sending shares mildly lower.
Shares of online clothing retailer Zalando rallied over 16 percent after it raised its full-year earnings guidance and reported a jump in second-quarter revenues of between 24 percent and 26 percent year-on-year.
On the data front, U.K. inflation rose 0.5 percent in June compared to a year ago, according to the Office for National Statistics.
In other news, Turkish President Tayyip Erdogan told CNN in an interview on Monday that the U.S. should extradite Muslim cleric Fethullah Gulen to Turkey, accusing him of involvement in Friday’s failed coup attempt. Gulen denies any involvement, however.
Source: CNBC
