By Ankika Biswas and Pranav Kashyap
(Reuters) -Europe’s main stock index dropped on Tuesday, bruised by a handful of bleak quarterly results from industry majors such as energy giant BP, drugmaker Novartis and lender Santander, while caution also prevailed ahead of some crucial economic data.
The pan-European STOXX 600 closed 0.6% lower, after touching an over one-week high intraday.
BP’s shares dropped 5% to July 2022 lows after the company’s third-quarter profit fell to the lowest in almost four years, pushing the energy sector index 1.2% down.
Novartis stock fell 4% as investors focused on the Swiss company’s lower-than-expected sales of a promising radiopharmaceutical, even as it raised its 2024 earnings guidance for the third time.
The healthcare sector index dipped nearly 1% to a three-week low, also dented by a 7.4% fall in dental-implants maker Straumann following a weak third-quarter performance in its North American business.
Travel and leisure was the worst-hit sector, as shares in German airline group Lufthansa slumped 5% after it reporting lower third-quarter operating profit.
However, Asia-focused lender HSBC Holdings jumped 3.3% after better-than-expected third-quarter profit and a $3 billion share buyback programme.
Of the STOXX 600 companies that have reported third-quarter earnings to date, 53% of them exceeded estimates, shy of the typical beat rate of 54%, fresh LSEG data showed.
Investors are also turning focus to a host of economic data including the euro zone bloc’s third-quarter GDP and October inflation, and U.S. GDP and non-farm payrolls print, all due this week.
Adding to economic concerns that prompted a European Central Bank rate cut earlier this month, the German Chamber of Commerce and Industry cut its previous forecast for a stagnation and expect zero growth in 2025 for Europe’s largest economy.
After hitting a record high last month, the STOXX 600 has turned sluggish. Caution surrounding the U.S. election could potentially delay the index’s journey to a key 530-point level.
“The 530 is a possibility before the end of the year, given the fundamentals potentially support it. But I think that would very much depend on the outcome of the U.S. election,” said Fiona Cincotta, senior market analyst at City Index.
Investors also awaited Alphabet’s results later in the day for the technology sector’s outlook, with a host of U.S. megacap earnings scheduled throughout the week.
Among other earnings, shares in Wartsila tumbled 13.5% after the Finnish engineering group’s third-quarter order intake miss.
Poland’s Santander Bank rose 4% after third-quarter results beat, while Adidas gained 3.8% on strong third-quarter growth in China.
(Reporting by Pranav Kashyap and Ankika Biswas in Bengaluru; Editing by Varun H K and Emelia Sithole-Matarise)