January 10, 2019 / 8:35 AM / 3 months ago

Weak results, lack of trade clarity drive European stocks down

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LONDON, Jan 10 (Reuters) - European shares tumbled on Thursday as optimism over U.S.-China trade talks dissipated after few details on progress emerged and a slew of weak earnings reports dented retailers and car stocks.

The trade-sensitive DAX was down 0.8 percent while the pan-European STOXX 600 lost 0.7 percent and Britain’s FTSE 100 fell 0.5 percent. The falls snapped Europe’s two-day rally which had taken it up to three-week highs.

German lighting company Osram was the biggest faller on the STOXX, down 7.2 percent after its CEO warned it suffered a weaker than expected final quarter of 2018 as auto demand slowed sharply.

The latest sign of weakness in the auto sector bruised car parts makers Faurecia and Valeo, losing 4.7 and 3.4 percent, and tyre maker Continental down 2.9 percent.

Italian carmaker Fiat Chrysler fell for different reasons: sources said it would pay more than $700 million to resolve lawsuits from the U.S. Justice Department over claims it used illegal software to allow diesel vehicles to emit excess emissions.

Autos were the worst-performing, down 1.6 percent.

Also among top fallers was Scout24, down 4.8 percent with traders citing a DealReporter article saying the online listings firm’s talks with private equity over a potential buyout have stalled.

In the UK, updates from retailers including Marks & Spencer, Tesco, B&M, and Halfords dominated with many adding to signs of a challenging Christmas due to poor consumer confidence.

Cycling and car parts retailer Halfords sank 23.2 percent to the bottom of the FTSE 250 after a profit warning.

Tesco was a silver lining, rising 2.3 percent to the top of the FTSE 100 after its Christmas trading came in better than peers with a 2.2 percent increase in sales. (Reporting by Helen Reid, Editing by Josephine Mason)

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