European markets turn lower as Russia-Ukraine concerns linger; earnings in focus; Ericsson down 14%

The pan-European Stoxx 600 index dipped 0.2% during afternoon deals, with major bourses and most sectors trading in negative territory

LONDON — European markets inched lower on Wednesday as investors assessed the geopolitical outlook following Russia’s claimed partial withdrawal from the Ukrainian border, while corporate earnings season rumbles on

The pan-European Stoxx 600 index dipped 0.2% during afternoon deals, with major bourses and most sectors trading in negative territory

Banks led the losses, down 1.2%, while oil and gas stocks rose 1.5%

Energy prices in Europe could increase if Western countries impose sanctions on Russia, with U.S. President Joe Biden saying on Tuesday that a sanctions package would include reducing European consumption of Russian gas

Meanwhile, British Prime Minister Boris Johnson said on Wednesday that the U.K. would target Russian banks and companies with sanctions if the country embarked on more aggressive activity toward Ukraine

Russian Foreign Minister Sergey Lavrov said Moscow would retaliate if Britain did impose any sanctions

Markets around the world rallied on Tuesday after Russia announced that it had begun returning some troops to deployment bases after training exercises near the Ukrainian border, assuaging fears of an imminent invasion and raising hopes of a de-escalation of recent tensions with the West

 

However, Western officials and Ukrainian President Volodymyr Zelenskyy have urged caution in taking Russia’s claims at face value, and NATO on Wednesday accused Russia of increasing the number of troops at the Ukrainian border

Stocks on Wall Street also took a downward turn on Wednesday, with the Nasdaq Composite shedding more than 1% during early trade. Investors in U.S. markets are monitoring earnings and key economic data

Earnings also remain a key driver of individual share price action in Europe, with Heineken, Ahold Delhaize, Air Liquide, MTU Aero Engines and Alcon among the companies reporting on Wednesday

Shares of Swedish tobacco company Swedish Match gained 5.2% to lead the Stoxx 600 on Wednesday after the firm posted record full-year sales and operating profit with double-digit growth in both revenues and earnings

Umicore shares gained 5% after the Belgian chemicals and metals recycling company posted an 81% jump in earnings for 2021 and optimistic guidance for 2022

At the bottom of the European blue chip index, Swedish IVF company Vitrolife fell by almost 20% after reporting a fall in fourth-quarter net income

Ericsson shares were trading 14% lower after the Swedish telecoms giant announced that an internal investigation had found serious compliance breaches at its business in Iraq

On the data front, U.K. inflation came in at an annual 5.5% in January, slightly ahead of forecasts and remaining at a 30-year high