LONDON: Stocks across the world were mostly softer Wednesday as weak corporate earnings prompted profit-taking, but losses were limited by an oil price rally following surprisingly low US inventories.
On Wall Street, disappointing earnings from Disney pushed the stock more than four percent lower.
Revenues from Walt Disney Co.’s closely watched cable television division fell, perturbing investors who have been worried about the prospects for its ESPN network as the traditional cable TV model comes under assault.
“The box office hits have not proved enough to offset weaker results from its theme parks and cable TV business,” said Jasper Lawler, at traders CMC Markets, calling Disney’s performance “an earnings miss”.
Investors also felt let down by retailer Macy’s results, and reacted badly to Staples and Office Depot ditching merger plans.
Around 1600 GMT, the Dow Jones index traded 0.7 percent lower.
In London, the benchmark FTSE 100 index eked out a small closing gain, boosted by mining and oil stocks which offset data showing that British industrial output grew more weakly than expected in March.
In the eurozone, Frankfurt DAX 30 fell 0.7 percent, with E.ON among the biggest fallers following results and fellow energy giant RWE also sharply down.
The Paris CAC 40 ended 0.5 percent lower.
“The market can’t speed up because there are no favourable economic data, but neither is there anything justifying a sharp price fall,” said Alexandre Baradez, analyst at IG France.
Enthusiasm about Greece seemingly on the way to unlocking fresh bailout money faded, as investors looked forward to the troubled eurozone member’s next likely crisis.
“The first discussions about debt relief offer little hope of a solution to Greece’s unsustainable debt mountain,” analysts at Capital Economics noted.
Financial stocks across the eurozone came under pressure from fresh turbulence in Italian banking stocks amid rekindled fears about bad loans.
Shares in Banco Popolare fell more than nine percent in Milan after the bank raised provisions for risky loans, while Banco popolare di Milano, which is to merge with Banco Popolare, dropped by more than six percent.
In Spain, Telefonica shares fell just over one percent after the EU blocked the sale of the Spanish company’s O2 unit to Hutchison Whampoa, claiming the tie-up would have hurt British consumers.
Oil prices received a lift from weekly oil stocks in the US falling by 3.4 million barrels against expectations of a 0.75 million increase — a sign that demand is picking up.
“That was a real surprise which caused oil prices to rise and limited stock indices losses,” said IG France’s Baradez.
The oil stocks surprise outweighed earlier oil price weakness seen as Canadian companies prepare to restart output after being closed by huge wildfires.
Asian equities tapered Wednesday after an early rally as nerves returned to trading floors, but Japan’s Nikkei hammered out a slight gain.
Key figures around 1600 GMT
New York – Dow: DOWN 0.7 percent at 17,807.58
New York – S&P 500: DOWN 0.4 percent at 2,076.13
New York – Nasdaq: DOWN 0.4 percent at 4,792.04
London – FTSE 100: UP 0.1 percent at 6,162.49 (close).
Frankfurt – DAX 30: DOWN 0.7 percent at 9,975.32 (close)
Paris – CAC 40: DOWN 0.5 percent at 4,316.67 (close)
EURO STOXX 50: DOWN 0.8 percent at 2,956.71
Tokyo: Nikkei 225: UP 0.1 percent at 16,579.01 (close)
Shanghai – composite: DOWN 0.2 percent at 2,837.04 (close)
Hong Kong – Hang Seng: DOWN 1.0 percent at 20,038.90 (close)
Euro/dollar: UP at $1.1445 from $1.1372 Tuesday
Dollar/yen: DOWN at 108.48 yen from 109.27 yen
Copyright AFP (Agence France-Presse), 2016
Courtesy : BRecorder