By Susan Mathew
(Reuters) -European stocks were flat on Tuesday as a slide in retailers and Swiss bank UBS offset a rally in oil stocks and Unilever, which rose after an upbeat sales forecast.
Retail stocks lost 2.1%, set for their biggest drop in six-weeks, hit by a profit warning from top U.S. retailer Walmart Inc, which cited surging prices for food and fuel affecting discretionary demand.
Europe’s luxury stocks fell, with LVMH down 0.3%. However, French liquor maker Remy Cointreau rose 0.4% after an earnings beat.
Swiss bank UBS lost 6.3% on posting a smaller-than-expected rise in second-quarter net profit as its investment banking and wealth management businesses struggled.
The pan-European STOXX 600 index was flat with broader sentiment remaining fragile on recession worries.
European Union countries are set to approve a weakened emergency proposal to curb their gas demand on Tuesday after Russia said it will further cut gas supplies to Europe from Wednesday.
“We think the EU might be able to avoid gas rationing … but the risks have risen significantly,” Credit Suisse European economist Veronika Roharova said.
“Even if rationing is avoided – the surge in gas prices driven by supply uncertainty will depress activity further.”
Data on Monday showed Europe’s biggest economy, Germany, maybe on the cusp of a recession. Last week, a survey showed euro zone business activity unexpectedly contracted in July.
Credit Suisse cut its real GDP forecast for the euro area to 2.3% from 2.4% in 2022, expecting the sharpest contractions in Germany and Italy.
Investors also braced for a likely 75-basis-point interest rate hike by the U.S. Federal Reserve on Wednesday.
Worries about monetary policy tightening to control surging inflation and fears of an energy supply crunch have sent the STOXX 600 down about 13% for the year.
London’s FTSE 100 outperformed, up 0.6%, as commodity prices jumped, with oil up for a second day. The biggest boost came from a 2.5% jump in consumer company Unilever after its sales beat and upbeat forecast. [.L]
About 30% of the companies that are part of the STOXX 600 have reported results this earnings season, with 56% of them beating estimates, according to Refinitiv.
Swiss chocolate maker Lindt & Spruengli jumped 4.2% on raising its sales outlook and unveiling a 1 billion Swiss franc ($1.04 billion) share buyback programme.
(Reporting by Susan Mathew in Bengaluru; Editing by Shounak Dasgupta)
Source: One America News Network
