European Stocks Open Steady as Retail Stocks Tumble With Kering

(Bloomberg) -- European equities were little changed at the open as retail stocks dropped, with Kering slumping after first-quarter sales.

The Stoxx Europe 600 Index was down less than 0.1 percent. All the European stock markets are closed tomorrow for a holiday. Kering dropped 5.5 percent after reporting first-quarter sales of 3.79 billion euros as Citigroup said that results may not be enough to drive earnings momentum. LVMH fell 1.1 percent.

In contrast, Nestle and Unilever added at least 1 percent. Unilever sales beat analyst estimates, helped by strong performance in the company’s home-care business. Nestle reported the strongest start to a year since 2016.

All eyes are on first-quarter earnings releases as investors try to gauge the strength of the global economy. Analysts in the monthly Bloomberg survey doubt that the rally in European equities can keep going as they see the Stoxx Europe 600 Index losing 8.9 percent from Wednesday’s close to 355 points by year-end.

“A number of recent investor surveys still places pan-European stocks in a pessimistic light with regard to current allocations and/or perceived prospective return capability and what appears to be a good start to the pan-European corporate results season should be taken for what it is: a positive,” said Chris Bailey, a European strategist at Raymond James. “And after Easter? Back to Brexit, the run-up to the European Parliamentary elections and more corporate reporting."

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