Economy 2 MIN READ

European shares fall as investors weigh key earnings

April 25, 2023By Reuters

European shares dropped on Tuesday as investors scrutinised more corporate earnings and weighed comments by European Central Bank policymakers on the outlook for interest rates.

The pan-European STOXX 600 index was down 0.4% by 0718 GMT, with mining and banking shares shedding 1.8% and 1.5%, respectively, while the food and beverages index rose 0.2%.

Banking sector jitters came back to the fore after US lender First Republic Bank said its deposits tumbled more than $100 billion last quarter and that it was exploring options such as restructuring its balance sheet.

UBS Group UBSG.S lost 2.8% after the bank set aside more money to draw a line under its involvement in toxic mortgages, dealing a heavy blow to its first-quarter profit.

ECB’s Philip Lane told a French paper that the central bank will need to raise interest rates again at its policy meeting next week, while board member Isabel Schnabel told Politico that a 50 basis points rate hike is not off the table.

Nestle rose 1.6% after it reported better-than-expected first-quarter sales.

US heavyweights Microsoft Corp and Google-owner Alphabet Inc will report results later in the day.

(Reporting by Shubham Batra in Bengaluru; Editing by Savio D’Souza)

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