SocGen shares slump in tough start to the week for European stocks

by user

Societe Generale was a high profile casualty among an eclectic batch of European stocks taking a battering at the start of the week as broader sentiment was hit by rising oil prices and bond yields.

Shares in SocGen

at one point slumped 11%, their biggest drop since March, after chief executive officer Slawomir Krupa’s maiden strategy update spooked investors.

The long-awaited plan fell foul of the market because it contained disappointing growth projections and a lack of detail on asset sales, according to analysts. “We are negatively surprised by lack of revenue growth, increased capital target, payout & ROTE cut, and by the lack of details,” analysts at Jefferies said in a note. ROTE refers to return on tangible equity and is used in assessing a company’s performance.

With French peer BNP Paribas shares

down 2%, the CAC 40
in Paris was the continent’s underperformer, shedding 1.3%. The DAX
in Frankfurt lost 0.9% as concerns about increased China competition continued to rattle carmakers such as Volkswagen

and Mercedes-Benz

London’s FTSE 100
fell 0.5% as property groups and housebuilders were sold ahead of an expected 25 basis point interest rate rise by the Bank of England on Thursday.

However, Goldman Sachs said it now expects that the next hike to 5.5% will mark the peak in bank rate for this cycle, down from a 5.75% forecast, as wages and price pressures “will have cooled sufficiently to allow the MPC to go on hold” in November.

The U.K. pound

earlier in the session hit a 15-week low around $1.2370 but was later up 0.2% to $1.2410 as benchmark 10-year gilt yields
gained 3.6 basis points to 4.398% in sympathy with the global trend.

Inflation angst was building as the Brent crude price

neared $95 a barrel, the most since last November, and German 10-year yields
were also firmer, adding 1 basis point to 2.690%.

Back among stocks, the biggest London-loser was S4 Capital
whose shares plunged 27% to a record low after the advertising group led by former WPP boss Sir Martin Sorrell delivered another profit warning.

“Martin Sorrell’s digital advertising agency is currently suffering from subdued client activity – its customers are worried about recession so they are cautious about signing off big advertising campaigns,” said Russ Mould, investment director at AJ Bell.

“This is not a new trend for S4 as it has been moaning about the state of the market for some time,” Mould added.

Another poor performer was Nordic Semiconductor

whose shares fell as much as 16% on Monday after the Norwegian chipmaker maker cut its revenue forecast on weak demand for its products, which are used for Bluetooth and wifi in battery-powered devices.

Source link

Related Posts

Leave a Review

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy