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European shares weighed down by IAG and Restaurant Group

European shares weighed down by IAG and Restaurant Group

LONDON: European equities fell on Friday and headed for their biggest weekly decline in one month, with travel and leisure stocks sending the market lower after updates from British Airways owner IAG and Restaurant Group.

The STOXX Europe 600 Travel and Leisure index fell 2.3 percent, the top sectoral decliner, putting pressure on the broader market.

International Airlines Group fell 4.3 percent, among the decliners in the FTSEurofirst 300 index. It said it would moderate its capacity expansion in the short term in response to weaker overall demand, despite reporting a forecast-beating rise in first-quarter profit.

Britain’s Restaurant Group, which operates chains such as Chiquito and Frankie & Benny’s, slumped 24.6 percent after warning on full-year profit outlook because it does not expect any improvement in trading conditions in the short term.

Spanish lender Bankia fell 1.7 percent after posting a 3.3 percent fall in first quarter net profit from a year earlier as lower provisions offset pressure from low interest rates.

“Weaker earnings are starting to become a problem,” Philippe Gijsels, head of research at BNP Paribas Fortis, said.

“Companies that disappoint are being punished disproportionately while those that surprise on the positive side shoot up, indicating that markets are nervous and have little patience with underperformance,” he added.

The pan-European FTSEurofirst 300, which hit a three-month high last week, was down 1.3 percent by 1206 GMT.

It has fallen more than 1 percent this week and remained on track to record its biggest weekly loss in one month.

Shares in Swiss money manager GAM, Swedish engineering group Sandvik and German airline group Lufthansa fell between 4.9 and 5.6 percent as their shares traded without the attraction of latest dividend payouts.

On the positive side, Danish wind turbine maker Vestas rose 4.4 percent, the top gainer in the FTSEurofirst 300 index, after posting a stronger-than-expected first-quarter operating profit before special items and maintaining its 2016 forecasts.

Copyright Reuters, 2016

Courtesy : BRecorder



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