European stock markets weakened Tuesday, continuing to feel the backlash of China’s regulatory crackdown while the corporate earnings season continues in mixed fashion.
The second-quarter corporate earnings season continues to dominate thinking in Europe, with a number of high-profile companies reporting results.
LVMH (PA:LVMH) stock rose 1.1% after the world's largest luxury goods group posted higher sales and profits, the sector recovering from the reopening of stores after the pandemic. Revenue for the first half was up over 11% from the comparable period in 2019, before the pandemic began.
Dassault Systemes (PA:DAST) stock rose 2.9% after the French software company lifted its 2021 outlook on surging software sales.
On the flip side, Reckitt Benckiser (LON:RKT) stock slumped 8.6% after the consumer goods company missed expectations for second-quarter sales, as demand eased for its hygiene products.
Sentiment in Europe was hit early after a largely negative handover from Asia, where several major Chinese tech stocks, listed in Hong Kong, remained under pressure on the back of regulatory fears surrounding China’s wider technology sector.
Investors will also await second-quarter results from the big tech giants Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) later Tuesday, given these companies have been behind a lot of the gains the major U.S. indices have registered for much of the last year. Late Monday, U.S. electric vehicle manufacturer Tesla (NASDAQ:TSLA) posted strong results, recording over $1 billion income for the second quarter.
Also of interest will be the start of the latest Federal Reserve two-day policy meeting, which could see the U.S. central bank providing more information over the strength of the U.S. economy as well as its thinking over when it will start to scaling back its hefty asset-purchasing program.
The economic data slate is largely empty in Europe Tuesday, with the day’s major release being the U.S. durable goods number for June, which should confirm the country’s growing recovery.
Elsewhere, oil prices were largely unchanged Tuesday, as traders continue to weigh the tightening of restrictions in parts of Asia amid a Covid-19 resurgence with growing demand in the more vaccinated West.
At 3:55 AM ET, U.S. crude futures traded 0.1% lower at $71.86 a barrel, while the Brent contract fell 0.1% to $73.67.