London: European stocks fell in early trade on Thursday, weighed by poor results from Swiss engineering group ABB, though Credit Suisse jumped after the size of its first-quarter profit surprised investors.
At 02:00pm (0837 GMT), the FTSEurofirst 300 index of top European shares was down 0.2% at 793.68 points after falling as low as 787.56 points. It rose 1% in the previous session.
ABB fell 3.5% after giving a cautious outlook and missing forecasts with a 35% drop in first-quarter profit as customers hesitated about investing in new equipment due to the economic downturn.
Credit Suisse, however, rose 7.3% after Switzerland’s second-largest bank posted a net profit of 2 billion Swiss francs ($1.71 billion) for the first quarter, twice as much as expected by analysts, and said it remained optimistic about its prospects.
Other banks were mixed. HSBC fell 0.5%, Barclays was down 0.8% and UBS dropped 1.8%. But Natixis gained 0.7%, Dexia rose 1.3% and UniCredit was up 3%.
“It’s another mixed bag. Whilst we could gain some optimism from Credit Suisse’s numbers, underlying concerns about the GM situation, and mixed numbers from Morgan Stanley will simply not disappear,” said Chris Hossain, senior sales manager at ODL Securities Ltd in a note.
“Only history will tell us if the doom-mongers are correct but what can’t be denied is that we haven’t seen a wide-ranging bout of optimism spread across the investing public.”
A spokeswoman for General Motors said on Wednesday the automaker is unlikely to make a $1 billion debt payment due 1 June because it expects to be in the process of restructuring its debt through a voluntary exchange or bankruptcy court by that point.
Morgan Stanley on Wednesday posted a bigger than expected quarterly loss and slashed its dividend.
Automakers also came under pressure after Japanese carmaker Toyota Motor Corp’s group-wide sales fell 27% in the first quarter.
BMW, Porsche, Volkswagen AG and Peugeot were down 1.3-3%.
“If the global economic downswing continues to worsen, we anticipate further pressure on auto ratings in 2009,” Standard & Poor’s says in a report.
Swiss drugmaker Novartis AG was up 4% after it reported a better than expected first-quarter net profit, down 14% due to a stronger US dollar as it warned ongoing currency losses could hit its full-year results.
Among miners, Lonmin Plc, the world’s third-biggest platinum producer, rose more than 5% after it posted a 30% rise in second-quarter platinum sales, helped by processing a backlog, and completed a $575 million debt refinancing package.
Across Europe, the FTSE 100 index, Germany’s DAX and France’s CAC 40 were down between 0.1 and 0.6%.