European shares dipped for a third straight session yesterday, led by Danish brewer Carlsberg after disappointing earnings, and some analysts expected further weakness in the market in the near term.
The world’s fourth-biggest brewer posted a weaker-than-expected quarterly profit as sales stalled in key market Russia and remained sluggish in western Europe, sending its shares tumbling 5.8 per cent. Trading volume in Carlsberg was robust, at almost five times its 90-day daily average.
The FTSEurofirst 300 closed down 0.2 per cent at 1,159.29, after a lacklustre session with Wall Street closed for President’s Day and retreating further from a two-year closing peak of 1,177.79 scaled at the end of January.
Trading volume on the index stood at just 68 per cent of its 90-day daily average.
Some strategists reckoned the recent sell-off was more of a pause than the start of a serious correction, following a rally that has propelled the FTSEurofirst 300 some 22 per cent above lows seen last June, and that any dips should be seen as a buying opportunity.
“There’s every chance that markets could go a little bit lower in the short term,” Henk Potts, market strategist at Barclays, said, although he was more confident further out.
The eurozone’s blue-chip Euro STOXX 50 index, however, ended up 0.1 per cent at 2,616.65. It stabilised after two sessions of losses, which drove it below a support line drawn from its low in July through its trough in November.
Charles Stanley technical analyst Bill McNamara said the breach of this support, alongside four thwarted attempts in day moving average, at 2,669, indicated that the technical outlook was deteriorating.
“I’m not going to take my long positions off or put on any shorts until I see it break below that closing low that was posted on the 7th of this month (the recent intermediate low at 2,597),” he said. Should it breach this, and take out the intermediate high from September 14, at 2,594, “that would amount to compelling evidence that it’s entered into a corrective phase”, he said.
Among bright spots, Natixis jumped 22.5 per cent after the French bank said it would simplify its finances by shedding a 20 per cent stake in BPCE, a network of cooperative lenders which controls it, paving the way for higher dividends.