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Bloomberg
European stocks fell, following stocks in the US, as investors awaited earnings reports and assessed the US president’s latest moves on trade and immigration.
The Stoxx Europe 600 Index declined 0.4 percent at 3:48 p.m. in London, approaching its lowest close this year. Media and chemicals shares fell the most, while gains in retail and real estate companies tempered the benchmark’s declines.
The benchmark index dropped 1.1 percent on Monday, erasing most of its increase this year. Some of the winners in the surge spurred by Donald Trump’s U.S. electoral victory are turning into losers as investors assess the potential for political fallout from his early decisions in office.
“We may only be 11 days into the first 100 days of the new Trump administration but one thing is becoming more apparent and that is that markets are going to be continually tested in the near term by the words and actions of President Trump,†Deutsche Bank strategist Jim Reid wrote in a note.
Credit Suisse equity strategists including Andrew Garthwaite and Marina Pronina wrote in a note that political risk in Europe is overstated for 2017, raising their year-end target for the Euro Stoxx 50 to 3,450 from 3,300. Fifteen out of 19 industry groups retreated. Chemical stocks led losses with a 0.8 percent retreat.
European banks are enjoying positive earnings revisions after six years of downgrades, according to data compiled by Bloomberg. The sector is expected to see a 22 percent jump in operating income this year, the strongest growth since 2010.