Europe stocks lower on stalled US health-care reform

Big 5

Bourses in Europe were lower early Tuesday with global sentiment dampened by a gridlock in U.S. politics over health-care reform.

The pan-European Stoxx 600 was 0.4 percent lower with most sectors moving south. The falls were led by basic resources after miners dropped their guidance for iron ore production. Rio Tinto’s shares were down by 1 percent.

Technology stocks also fell in mid-morning deals after a mini-crash in Chinese tech stocks. The technology-heavy index ChiNext plunged 5.1 percent on Tuesday to close at its lowest since 2015 after renewed calls for stronger regulation.

Back in Europe, the focus was on earnings. Shares of Ericsson dropped 10 percent in mid-morning trade after the company reported operating losses above expectations and announced it’s speeding up cost-cutting measures. The Swedish firm hit the bottom of the benchmark.

The online retailer Zalando fell 7 percent after saying Tuesday that it expects sales growth of about 20 percent in the second quarter of this year, slightly below the 22 percent expected by Reuters estimates.

At the top of the European benchmark was spread-betting firm IG Group. Its shares were up by nearly 9 percent after reporting an increase in full-year pretax profit on a higher number of clients.

Royal Mail, British land at the top of the FTSE

Royal Mail was among the top performers of the FTSE 100, up by 3 percent. The British group announced an increase of 1 percent in revenue for the second quarter of the year despite uncertainty in the market.

British Land rose 3 percent after announcing plans to spend up to £300 million to buy back its shares in the current financial year.

The Swiss pharmaceutical Novartis confirmed its full-year guidance with net income at $2.87 billion in the second quarter of the year. The firm added that it sees potential for “several highly innovative products.” Its shares were up by 2 percent.

Inflation slows down; sterling drops

U.K. consumer prices rose 2.6 percent on the year in June from 2.9 percent in May, data from the Office for National Statistics showed. The drop in consumer prices was mainly due to lower oil prices. As a result, sterling moved lower against the dollar as expectations of a rate hike this year slowed down.

Later in the session, Bank of America and Goldman Sachs are due to report before the U.S. opening bell.

Source: CNBC

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