European stocks grappled on Tuesday, with investors balancing the generally stronger-than-expected Q3 earnings results with concerns about rising coronavirus cases.
In the previous session European stocks slipped further after their biggest fall since September. Concerns over the worsening pandemic intensified.
The Stoxx Europe 600 SXXP, -0.45% dropped 0.7%, after a 1.8% tumble on Monday. Moreover, decliners from apparel makers included LVMH Moët Hennessy MC, -0.85% and from insurers including Allianz ALV, -1.27%.
The French CAC 40 PX1, -1.15% lost 1.5%. Also losing ground were the German DAX DAX, -0.54% and U.K. FTSE 100 UKX, -0.01%.
Futures on the Dow Jones Industrial Average YM00, 0.14% gained 8 points. The rise followed a rough 650-point downturn on Monday for the blue chips DJIA, -2.29%.
According to published reports, German Chancellor Angela Merkel told her Christian Democratic Union party colleagues the coronavirus situation is threatening.
On Monday night, strict measures were introduced, including the 6 p.m. closures of bars and restaurants which Italians protested to.
In Paris, COVID-19 patients represent 67% of intensive care capacity.
Holger Schmieding, Berenberg Bank’s chief economist said, for the second time, Europe turns into an epicenter of the COVID-19 pandemic. The partial curfews and other restrictions to contain its spread cast a dark shadow over the near-term outlook, he added.
Stocks fell as investors digested the implications of new lockdown measures. Countries including Spain and Italy announced new restrictions to stem the surge in infections.
Third-quarter Earnings Results
Q3 results have handily beaten analyst estimates on both sides of the Atlantic. Firms in the Stoxx 600 are expected to report a 28% drop in Q3 earnings per share. This compares with the 34% downturn expected at the end of June.
HSBC Holdings HSBA, 6.70% rallied 7%. The U.K.-based, China-focused bank topped analyst estimates with a Q3 profit of $2 billion.
The bank said it would decide in 2021 on making a “conservative” dividend payment. Spanish bank Banco Santander SAN, 3.89% also topped estimates gaining 3%.
Though revenue was shy of expectations, BP BP, 1.47% rose 2% as the oil giant’s adjusted profit topped estimates.
Capgemini CAP, 4.50% climbed 4% as the IT consultant reported stronger-than-forecast Q3 revenue SAP, 2.52%. The firm has been pressured on Monday after SAP’s profit warning.
Meanwhile, Drugmaker Pfizer Inc (N:PFE) said on Tuesday it wasn’t ready yet to release data. This data is from the late-stage trial of the COVID-19 vaccine candidate it’s developing with Germany’s BioNTech SE (F:22UAy).