(Bloomberg) — European stocks fell on Tuesday, led by declines in tech shares and travel firms, as worries over rising coronavirus cases weighed on investor sentiment as the earnings season kicks off.
The Stoxx 600 Index closed 0.8% lower in London. Tech firms ASML Holding NV and SAP SE were among the biggest decliners, and in the U.S. megacap tech stocks were also under pressure. The sector had been the best performer during the market rebound until recently, thanks to its robust cash flows and increased sales during lockdowns.
European equities have rallied more than 30% from a March low and also made gains in July, though investors are becoming increasingly concerned about the jump in new Covid-19 cases in some U.S. states as well as rising U.S.-China tensions. Market players are looking at the earnings season for clues on the picture ahead for companies as they grapple with the impact of lockdowns on their businesses.
“I’m hoping we get some clarity on forecasts for 2021 moving into 2022, but I’m wondering whether actually, in a month or two’s time, we’ll still be a bit in the dark about what the outlook really is,” Ian Williams, a strategist at Peel Hunt, said by phone. “It could be a bit bumpy, we’re hoping for clarity quickly ,but I think the environment we’re in makes it difficult for companies to provide that.”
As earnings reports trickle in, oil and gas exploration firm Aker BP ASA’s second-quarter earnings before interest, taxes, depreciation, and amortization missed analysts’ estimates, sending the stock 2.4% lower. Meanwhile meal-kit maker HelloFresh SE surged as much as 6.3% earlier after saying that it expects its revenue for the second quarter to be “significantly” above market expectations, before giving up the gains later in the day.
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