European shares slide on weak earnings, Ukraine jitters

European stocks fell on Tuesday, kicking off March on a glum note due to weak earnings reports and jitters over the Ukraine crisis after ceasefire talks between Moscow and Kyiv failed to reach a breakthrough.

The pan-European STOXX 600 index dropped 1.3%, with the travel and leisure sector leading losses after disappointing earnings from betting group Flutter.

Shares in pandemic winners including German online fashion retailer Zalando and meal-kit delivery firm HelloFresh dropped 6.9% and 8.0% respectively after downbeat profit forecasts.

European benchmarks piled on losses amid elevated volatility even as Wall Street indexes trimmed losses overnight and Asian stocks steadied. [MKTS/GLOB]

Ceasefire talks between Russia and its southern neighbour held on Monday failed to reach a breakthrough and negotiators have not said when a new round would take place.

Stock markets across the globe plunged on Monday after the West imposed tough sanctions on Russia, including preventing its central bank from using its $630 billion foreign reserve war chest.

“The oil price is what is going to have the biggest transmission into the global economy. What we’ve seen so far is that oil price has been really volatile but hasn’t moved that much higher as sanctions so far have avoided touching the oil flows from Russia,” said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management.

Shell (LON:RDSa) inched down 1.1% after the London-listed energy major said it would exit all its Russian operations, including a major liquefied natural gas plant.

The world’s biggest shipping firm Maersk said it would halt container shipping to and from Russia.

Meanwhile, IHS Markit’s survey showed momentum in euro zone manufacturing growth waned slightly last month but activity was still strong and supply chain constraints eased.

German chemicals maker Covestro gained 3.0% after saying it had more than doubled its 2021 core profit and expected upbeat earnings for 2022.