April 24, 2018 / 9:14 AM / 5 months ago

European shares choppy as earnings fail to set trend, yields rise

LONDON (Reuters) - European shares steadied on Tuesday as a batch of company updates failed to set a clear trend and chipmakers were weighed down by AMS’ warning of a downturn in orders.

FILE PHOTO: The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany, March 21, 2018. REUTERS/Tilman Blasshofer

The pan-European STOXX 600 benchmark ended flat at the end of a choppy day, marginally weighed down after the U.S. 10-year Treasury yield rose above 3 percent for the first time since 2014.

The rise in bond yields, which investors fear could hurt equities, has been partly fueled by the spike in crude oil prices, which on Tuesday crossed $75, boosting energy shares.

The oil and gas index .SXEP was the biggest sectoral gainer, up 1 percent at its highest level in around three years.

Austria-based chipmaker AMS (AMS.S), which supplies Apple AAPLO, tumbled 9 percent after reporting lower orders from one of its main customers, which it did not name, also hitting shares in other companies in the sector.

“It is reasonable to assume that this will have a negative impact on STM’s Q2 guidance as well”, Liberum analysts said as shares in STMicro (STM.MI) fell 0.7 percent and peer Dialog Semi (DLGS.DE) tumbled 6 percent.

Germany’s SAP (SAPG.DE) rose 3.5 percent after saying it was gaining ground on competitors Salesforce (CRM.N) and Oracle (ORCL.N) in the cloud and that its margin recovery was firmly on track.

The banking sector .SX7P, down 0.1 percent, got little support from the results of Santander (SAN.MC), the euro zone’s biggest bank by market value, whose shares fell 3.2 pct after profits in the UK disappointed.

Deutsche Bank AG (DBKGn.DE) however added 4.2 percent. It may spell out strategy changes for its investment bank on Thursday along with first-quarter earnings.

Swiss bank UBS (UBSG.S) had failed to cheer up investors on Monday after its flagship wealth management business missed forecasts.

In the auto sector, truck maker AB Volvo (VOLVb.ST) fell 4.6 percent after it warned that its supply chain was coming under pressure, while results from automaker PSA Group (PEUP.PA) disappointed, weighing on its shares.

Tire maker Michelin (MICP.PA) rose 1.6 percent, recovering from initial losses that followed a fall in first-quarter revenue.

Dutch paints and coatings maker Akzo Nobel (AKZO.AS) lost 2.3 percent after reporting a larger-than-expected 28 percent drop in first-quarter core profit.

Elsewhere, Banca Mediolanum (BMED.MI) fell 1.4 percent after Italy’s tax police asked the Italian asset manager to pay taxes totaling 544 million euros in a dispute over the residency of its Irish arm.

Bollore (BOLL.PA) fell 6 percent after French police questioned billionaire Vincent Bollore over allegations his group worked on the election campaigns of presidential candidates in two African countries in return for lucrative port contracts.

Reporting by Julien Ponthus; Editing by Andrew Heavens and Catherine Evans

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