Auto stocks drive losses in European equities; LVMH shines

The DAX chart of the German stock price index is pictured on the stock exchange in Frankfurt, Germany, January 25, 2022. REUTERS/Staff

Jan 28 (Reuters) – European stocks fell on Friday, dragged down by auto stocks and a general tone of risk aversion due to geopolitical tensions in Ukraine and the prospect of higher interest rates.

The pan-European STOXX 600 fell 1.0% and was on track for its fourth consecutive weekly decline.

Eurozone bond yields rose as markets continued to digest the more hawkish-than-expected message that emerged from the Fed’s monetary policy meeting earlier this week.

As geopolitical uncertainty surrounding the Russian-Ukrainian conflict also rattled investor sentiment, the index is looking at its worst month since October 2020.

“Uncertainty over whether the US Federal Reserve can still guide us to a soft landing has pushed market volatility to its highest level in more than a year,” said Mark Haefele, chief investment officer at UBS. Global Wealth Management.

“But underlying economic growth is expected to remain robust in the first half…(which) favors cyclical companies and value stocks…We believe that Eurozone equities, which offer undemanding valuations, will be among the main beneficiaries.”

Tech stocks (.SX8P) hit their lowest level in nearly a year and trailed their worst month since 2008, as market expectations for four to five rate hikes this year are expected to hurt the rally in growth stocks from last year.

Meanwhile, France recorded its strongest growth in more than five decades last year, reaching 7%, as the euro zone’s second-largest economy rebounded faster than expected from the COVID-19 crisis, according to the data. Read more

But Germany’s economy, Europe’s largest, contracted more than expected in the fourth quarter of last year as COVID-19 restrictions hampered activity. Read more

Auto stocks (.SXAP) dragged losses versus the benchmark, with shares of Volvo (VOLVb.ST) tumbling 3.5% after the Swedish truckmaker reported lower-than-average core earnings. fourth quarter and proposed a lower than expected dividend. Read more

Retail stocks (.SXRP) were the only sector to trade in positive territory, led by Sweden’s H&M (HMb.ST). The fashion retailer gained 5.2% after posting a bigger-than-expected rise in profit for the September-November period. Read more

Luxury goods maker LVMH (LVMH.PA) rose 1.4% after the world’s largest luxury goods conglomerate said fourth-quarter sales growth accelerated, while Signify NV ( LIGHT.AS), the world’s largest lighting maker, jumped 14.6% after reporting higher quarterly profits. . Read more

Sweden’s Electrolux fell 4.7% after saying global supply chain problems would persist, after posting a decline in fourth-quarter profits. Read more

Spain’s largest domestic lender, Caixabank (CABK.MC), fell 2.3% after lower lending revenue contributed to a 52% drop in its recurring net profit in the fourth quarter. Read more

Reporting by Anisha Sircar and Susan Mathew in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli

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