European shares end lower as UBS unveils Archegos hit, travel stocks soar

The pan-European STOXX 600 index slipped 0.1 per cent, with investors holding off big bets ahead of a policy decision by the US Federal Reserve today. — Reuters pic
The pan-European STOXX 600 index slipped 0.1 per cent, with investors holding off big bets ahead of a policy decision by the US Federal Reserve today. — Reuters pic

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FRANKFURT, April 28 ― European stocks ended a shade lower yesterday as optimism over strong British earnings was offset by UBS disclosing a hit from dealing with US investment firm Archegos, while travel stocks scaled record highs on hopes of a post-Covid rebound.

The pan-European STOXX 600 index slipped 0.1 per cent, with investors holding off big bets ahead of a policy decision by the US Federal Reserve today. The bank is widely expected to maintain easy monetary policy.

Oil major BP rose 0.4 per cent after its first-quarter profit soared and it planned share buybacks, while Asia-focused lender HSBC gained 4.2 per cent after it reported an upbeat quarterly profit.

Meanwhile, UBS fell 2.0 per cent to a two-month closing low as it took an unexpected US$774 million (RM3.17 billion) hit from Archegos, overshadowing a forecast-beating 14 per cent rise in quarterly net profit.

Still, markets were caught in a tight trading range as investors watched for any clues on the timing of the Fed's eventual policy tightening, which the bank has said will depend on employment and inflation levels.

“Ultimately, the exact timing of tapering will be a judgement call by the Fed,” Unicredit analysts said.

“They will likely want to see a sequence of better data on jobs and economic activity that substantially reduces the 'gaps' to pre-crisis levels, reinforced by a sustainable improvement in the health situation.”

Global stocks have hit record highs recently on optimism about a economic recovery as the pace of vaccination picked up across developed economies.

European travel stocks shared this sentiment, surging 3.0 per cent to close at a record high. Bank stocks also ended higher on upbeat earnings, as well as support from increasing euro zone bond yields.

About a quarter of STOXX companies are set to publish earnings this week. Among the 17 per cent that have reported so far, 65 per cent exceeded profit estimates, according to Refinitiv IBES data.

Sweden's Evolution Gaming Group jumped 14.5 per cent to the top of the STOXX 600, as it reported a 150 per cent jump in quarterly core earnings as the Covid-19 pandemic boosted demand for online casino games.

Danish freight forwarder DSV Panalpina surged 6.8 per cent after it agreed to buy the logistics division of Kuwait's Agility Public Warehousing Co in a deal worth US$4.1 billion.

French diagnostics group Biomerieux fell 6.9 per cent to the bottom of the STOXX 600 after it halved its sales outlook for the first half of the year as the easing pandemic looked to cut demand. ― Reuters

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