European shares flat as higher yields counter earnings bump (updated)

Coloplast A/S

09/02/2024 09:52

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        * 
      Ubisoft gains on higher Q3 net bookings
    

        * 
      Deutsche Pfandbriefbank extends slide 
    

        * 
      Saab gains on raising mid-term sales target
    

  
 (Updated at 0928 GMT)
    By Shristi  Achar A
       Feb 9 (Reuters) - 
    European shares were trading flat on Friday, as gains in
healthcare stocks and video games group Ubisoft were offset by a
rise in government bond yields following a pullback in
aggressive bets on early interest-rate cuts. 
    The pan-European STOXX 600 index  .STOXX  was unchanged at
485.12 points, as of 0928 GMT.
     Ubisoft  UBIP.PA  jumped 15.9% after the video games group
reported third-quarter net bookings slightly above its forecast.
    Healthcare stocks  .SXDP  led advances, helped by a 9.1%
rise in Coloplast  COLOb.CO  after the Danish medical equipment
maker reported better-than-expected first-quarter results. 
    Focus was also on luxury stocks as Hermes shares  HRMS.PA 
rose 4.3%, notching a fresh record high after the Birkin bag
maker's sales jumped in the fourth quarter. 
    Weighing on the index, L'Oreal  OREP.PA  dropped 6.7% after
the French cosmetics company reported underwhelming
fourth-quarter sales growth.
    Fourth-quarter earnings are estimated to decrease 7.6%
year-on-year for STOXX 600 firms, according to LSEG data, with
just about 55% of the 85 companies that have reported so far
beating profit expectations. 
    "Companies have been in a high input cost environment for a
long time (and) we're seeing a slow down in demand. So the way
they are trying to manage is by giving out on margins," said
Anthi Tsouvali, multi asset strategist at State Street Global
Markets. 
    While some strong quarterly earnings updates have propelled
the benchmark index to eke out modest weekly gains, investor
concerns over elevated interest rates for long have kept further
gains in check. 
    Hurting equities on the day, the yield on the German 10-year
government bond  DE10YT=RR  rose for third-straight session,
last at 2.358%, as bets of an early interest-rate cut by the
European Central Bank eased after several rate-setters warned
against such a move.   GVD/EUR 
    Money markets now see a 48% chance of a rate cut in April,
having fully priced in such a move at the end of January.
 0#ECBWATCH  
    Among other earnings, Saab  SAABb.ST  jumped 6.2% after the
defence equipment maker lifted mid-term sales growth targets. 
    Sweco  SWECb.ST  dropped 11.8% to the bottom of STOXX 600
after the Swedish engineering and architecture consultancy
company posted fourth-quarter EBITA below expectations. 
    Meanwhile, Deutsche Pfandbriefbank (PBB)  PBBG.DE  shares
extended their declines, down 3.2% over concerns over its
exposure to the U.S. commercial real estate market.

 (Reporting by Shristi Achar A in Bengaluru; Editing by Mrigank
Dhaniwala and Arun Koyyur)
 ((Shristi.AcharA@thomsonreuters.com
https://twitter.com/ShristiAchar;))