European stocks were mixed Monday as automakers weighed in Germany and corporate earnings hit both indices in London, while benchmarks elsewhere all managed to notch up gains.
The FTSE 100 was more than 1% lower heading toward the close Monday, quoted at 7,368, while the mid-market FTSE 250 was down 0.86% at 19,582 making them both Europe's worst performers for the session.
The CAC 40 in Paris bucked the trend in Western Europe for the session, with a gain of 0.40% to 5,140, while the DAX slid 0.10% to 12,228 in Frankfurt. The FTSE MIB in Milan and the IBEX in Madrid each notched a positive return, with gains of 0.5% or more.
Near-prime consumer credit firm, Provident Financial, was the biggest mover on the FTSE 100 Monday after posting a near 5% loss ahead of Tuesday's interim results. The shares are already down 30% in the last three months after a surprise profit warning hastened an already in-progress correction for the lender, which normally trades a premium to its consumer credit peers.
The lender blamed difficulties encountered with the reorganization of its consumer credit division for hitting the bottom line during the second quarter and its anticipated effect on the full-year results. Some analysts have suggested that there could be further downgrades to guidance during the rest of the year and that the stock no longer deserves the premium valuation that it continues to trade at.
"We think another profit warning for Home Credit is likely, since guidance remains too optimistic, in our view. The disruption to date validates our previously held concerns about rising impairments and customer attrition," said Portia Patel, an analyst at Liberum Capital, in July.
Reckitt Benckiser (RBGLY) was also a big faller Monday after reporting a steeper-than-expected fall in its second-quarter sales after some of its systems were taken down by the ransom-ware cyber attack that swept across the globe in May. The shares were down nearly 4% in late trading.
In the mid-market, Petra Diamond (PDMDF) missed production guidance by around 13%, prompting a near double-digit fall in the share price, while Barrick Gold's (ABX) Acacia Mining saw its stock slump by a low double digit number as analysts reacted to Friday's half-year results.
The gold miner, which is majority owned by Barrick but listed in London, has spent much of the year struggling with the fallout from the Tanzanian government having banned exports of gold concentrate in an effort to develop the domestic smelting industry. It is also fighting off allegations of tax evasion.
Acacia burned through half of its cash reserves during the six months ending June 30, with just $176 million left in the bank at the end of the period, down from $318 million at the end of last year. It has been unable to sell more than 120,000 ounces of concentrate due to the export ban and has enlisted parent, Barrick, to help negotiate with the Tanzanian government. The shares have fallen close to 50% for the year to date.
Over in continental Europe, car makers were the scourge of all major benchmarks during the session after a Spiegel report suggested at the weekend that the German car makers have been operating as a cartel since the 1990s. The European Commission is now investigating the claims and if found to have substance, and the firms are then found guilty, those involved could face fines equivalent to as much as 10% of their global turnover.
Mercedes-Benz maker Daimler (DDAIF) and BMW (BMWYY) were the hardest hit Monday, with losses of more than 3% during noon trading, while Volkswagen (VLKAY) saw a more moderate 2% loss. Reuters reported last week that the major car firms have agreed to a rescue plan with the German government, which is expected to be unveiled in August, although it is not clear what this so-called rescue will entail.
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