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Carrefour plunge rattles retail stocks as Europe extends gains
August 31, 2017 / 7:28 AM / 4 months ago

Carrefour plunge rattles retail stocks as Europe extends gains

LONDON, Aug 31 (Reuters) - Europe’s shares extended their relief bounce on Thursday but were unlikely to avoid a third straight month of losses as they entered the last trading day of an unusually turbulent August, and a profit warning from Carrefour sank the retail sector.

The pan-European STOXX 600 gained 0.4 percent while euro zone stocks and blue-chips rose 0.6 percent, boosted by strong gains from miners and construction stocks as the price of copper rose.

Carrefour shares dropped 12.8 percent to their lowest level in nearly five years after the French supermarket chain warned 2017 profit could fall by 12 percent and cut its sales growth target.

It reported weaker than expected first-half earnings as intense competition in the retail sector weighed on margins.

French peer Casino also fell more than 5 percent as investors read across to the retailer.

The retail index, one of the worst-performing in Europe this year as competition and structural pressures mount, sank 1 percent.

Pernod Ricard shares slipped 2.4 percent after the world’s second biggest spirits group reported 2016/17 results.

Though banking stocks helped stoke gains on Thursday, they were headed for their worst monthly losses since June last year when Britain’s vote to exit the EU roiled markets.

The STOXX 600 was set to close in the red for a third month.

While a global consensus has formed this year around stronger prospects for European equities, the region’s main benchmarks have slipped in the summer months as company earnings were measured up against lofty expectations, and a surging euro reined back the highly internationally exposed European stock markets.

Reporting by Helen Reid, Editing by Kit Rees

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