12.05.202215:51 Forex Analysis & Reviews: European stocks start trading session with large drop

On Thursday, the key European indices are steadily falling amid the financial statements of key corporations in the region and statistics.

At the time of writing, the composite index of the leading companies STOXX Europe 600 decreased by 2.16% to 418.36 points. Since the beginning of 2022, this index has already lost more than 14%.

UK investment firm Hargreaves Lansdown PLC lost 7.1% and Norwegian advertising company S4 Capital Plc declined by 7.4% being among the top losers of the STOXX Europe 600 components.

The British FTSE 100 index plummeted by 2.04%, the French CAC 40 lost 1.78%, and the German DAX index declined by 1.76%.

Top gainers and losers

The shares of French luxury goods manufacturers suffered maximum losses on Thursday. For example, Hermes lost 5%, while Kering and Louis Vuitton declined by 4.5%.

The capitalization of the German energy company RWE AG dropped by 0.6%, despite the fact that its adjusted net profit more than doubled in the first quarter of this fiscal year.

The securities of German industrial conglomerate Siemens Energy AG declined by 5%. In the second quarter of 2022, the company's net profit halved due to write-offs related to its Russian business.

The capitalization of the German tour operator TUI AG grew by 2.6% on Thursday. Yesterday, the company's management announced plans to reach a profitable level by the end of the current fiscal year.

The securities of the Italian banking group UniCredit rose by 0.8% on the news of preliminary talks on the sale of a subsidiary bank in Russia.

The share price of the British aircraft engine manufacturer Rolls-Royce Holdings Plc increased by 0.4%. Recently, the company's management reported that the financial performance of Rolls-Royce at the beginning of this year is in line with the estimates.

On Thursday morning, statistical data on the UK economy was published, which turned out to be lower than market forecasts. Thus, according to experts' preliminary estimates, in the first quarter, the country's gross domestic product increased by 8.7% in annual terms and by 0.8% in quarterly terms. Economists forecasted the growth of the index by 9% in January-March and by 1% in the past quarter.

In March, the volume of industrial production in the country decreased by 0.2% as compared with February. At the same time, experts forecasted an increase of the index by 0.1% in monthly terms.

An additional downward factor for the stock market in Europe on Thursday was also a strong drop in US stock exchanges, recorded at the end of the trading session on Wednesday.

Yesterday's trading results

Yesterday, European indicators showed a significant increase. Traders assessed corporate reports of local companies for the previous quarter as well as macroeconomic statistics.

As a result, the composite index of the leading European companies STOXX Europe 600 rose by 1.74% to 427.59 points.

The top results among STOXX Europe 600 components were shown by securities of the British company Homeserve, which provides repair services, which increased by 13.5%.

Evotec SE, a German drug discovery and development company, dropped by 0.6%, Roche Holding, a Swiss pharmaceutical holding, declined by 6.9%, and Bayer AG, a German multinational chemical corporation, lost 6.2%. The companies were among the top losers among the components of the index.

The key British FTSE 100 index rose by 1.44% on Wednesday, the French CAC 40 gained 2.5%, the German DAX increased by 2.17%, and the Italian FTSE MIB and the Spanish IBEX 35 added 2.84% and 2.13% respectively.

The share price of German tour operator TUI AG rose by 5.6% yesterday. Earlier, the management of the company announced its plans to reach a profitable level by the end of the current fiscal year.

ThyssenKrupp AG, Germany's largest steelmaker, soared by 11% after reporting second-quarter financial results that were the highest in a decade.

The Swedish tobacco and cigar manufacturer Swedish Match jumped by 9% at the Stockholm trading. The reason for such a spectacular growth of shares was the announcement of the American Philip Morris about the purchase of Swedish Match for $16 billion.

The capitalization of Germany's largest energy giant, E.ON SE, surged by 3.8% on Wednesday as revenues soared by 60% in the first quarter.

The value of the securities of French railway train manufacturer Alstom SA fell by 5.2%. Even the company's strong corporate reports failed to push the stock upward. In 2022, Alstom SA's revenues rose by 76% thanks to a more than two-fold increase in orders.

The share price of the German energy company Siemens Energy AG decreased by 5% the day before. In the second quarter of the current fiscal year, Siemens' net loss increased eightfold.

On Wednesday, European investors focused on statistics for the region. According to the German Federal Statistical Office (Destatis), consumer prices in the country rose by a record 7.8% year-on-year in April. At the same time, the inflation rate in monthly terms amounted to 0.7%.