European Report: Hangover from Carlsberg hits European stock

EUROPEAN shares dipped for a third straight session yesterday, led by Danish brewer Carlsberg after disappointing earnings, and some analysts expected further weakness in the market in the near term.

The world’s fourth-biggest brewer posted a weaker-than-expected quarterly profit as sales stalled in key market Russia and remained sluggish in western Europe, sending its shares tumbling 5.8 per cent.

Trading volume in Carlsberg was robust, at almost five times its 90-day daily average.

The FTSEurofirst 300 closed down 0.2 per cent at 1,159.29, after a lacklustre session with Wall Street closed for President’s Day and retreating further from a two-year closing peak of 1,177.79 scaled at the end of January.

Trading volume on the index stood at just 68 per cent of its 90-day daily average.

Some strategists reckoned the recent sell-off was more of a pause than the start of a serious correction, following a rally that has propelled the FTSEurofirst 300 some 22 per cent above lows seen last June, and that any dips should be seen as a buying opportunity.

“There’s every chance that markets could go a little bit lower in the short term,” Henk Potts, market strategist at Barclays, said, although he was more confident further out. “I still think in the medium to long term the fundamentals remain incredibly supportive around corporate profitability, growth, around M&A activity, health of balance sheets, and undemanding valuations.”

The Eurozone’s blue-chip Euro STOXX 50 index, however, ended up 0.1 per cent at 2,616.65. It stabilised after two sessions of losses, which drove it below a support line drawn from its low in July through its trough in November.