European stocks dropped on Tuesday as earnings season rolled on. UK shares outperformed, helped by gains in BP Plc and HSBC Holdings Plc.
The Stoxx 600 Index fell 0.4% by 9:25 a.m. in London, with basic resources and media sectors leading declines. Man Group Plc slid after the world’s largest publicly traded hedge fund firm reported core net revenue that missed estimates. Diageo Plc shares gained on better-than-expected sales.
In other single stock moves, BP advanced as the company raised its dividend and said it would buy back another $1.5 billion of shares. HSBC shares rose after the lender’s second-quarter revenue beat estimates and it announced a new buyback program.
“Earnings season has been solid in the UK,” Tineke Frikkee, head of UK equity research at Waverton Investment Management said, adding that pandemic-related comparatives continue to distort company growth rates.
Elsewhere, miners including Anglo American Plc, Glencore Plc and Rio Tinto Plc fell on the back of lower iron ore prices after fresh data highlighted concerns around China’s struggling property sector.
“Today’s economic agenda shifts the focus back to the weakness of the manufacturing sector, as well as the resilience of the US labor market,” Michael Hewson, chief market analyst at CMC Markets UK said.
“It is clear that the manufacturing sector is experiencing a clear deflationary impulse which is likely to continue to act as a drag on prices in the coming months,” he added. “The bigger question is whether this translates into a similar drag on the services sector, and here prices are proving to be slightly stickier.”
For more on equity markets:
- In UK Equity Gloom, High-Dividend Blue Chips Shine: Taking Stock
You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance. To subscribe to a daily list of European analyst rating changes, click here.