Europe's STOXX 600 dips as earnings disappoint; data on tap

European shares slipped on Wednesday following a batch of disappointing earnings reports from companies including HSBC and JDE Peet's, while investors look out for region-wide consumer confidence data. HSBC shares tumbled 7.1%, set for their biggest one-day drop since March 2020, after the company's annual profit missed estimates.

European shares slipped on Wednesday following a batch of disappointing earnings reports from companies including HSBC and JDE Peet's, while investors look out for region-wide consumer confidence data.

HSBC shares tumbled 7.1%, set for their biggest one-day drop since March 2020, after the company's annual profit missed estimates. The broader banks index also fell 0.8%. The pan-European STOXX 600 index dropped 0.2%, bogged down by a 0.9% loss in healthcare stocks, which eased from a ten-month high hit in the previous session.

Shares of Fresenius Medical Care fell 3.4%, extending Tuesday's decline as analysts flagged a weak outlook for patient volumes from the German dialysis specialist. "We've seen a little bit of weakness (in terms of earnings) in some sectors, which is not surprising," said Daniela Hathorn, a senior market analyst at Capital.com.

"Companies have been struggling as well and having to pay higher wages; financing is also more expensive for them, so it's not uncommon to see a period of weaker earnings." Earnings and corporate updates from companies across the continent have been mixed for the quarter, though the benchmark STOXX 600 hit a two-year high recently as investors focus on the possibility of a first interest rate cut by the European Central Bank this year.

Adding to the gloom, basic resources shares lost 1.5%, weighed down by a 5.6% drop in Glencore as the UK miner reported bleak earnings and slashed its payout to investors. Peer Rio Tinto also moved 2.1% lower after reporting a decline in annual profit.

Among other movers, coffee company JDE Peet's forecast 2024 organic sales growth at the low end of its mid-term target, taking its shares 4% lower. Carrefour climbed 4.4% after Europe's largest retailer reported solid results and announced a 55% dividend hike on Tuesday.

EFG International rose 3.5% after the Swiss private bank reported a jump in net profit last year, marking a record profit for the lender, which has hired extensively from Credit Suisse in the wake of the bank's collapse. On the data front, investors await flash eurozone consumer confidence data for February, due at 1000 GMT. Later in the day, the U.S. Federal Reserve will release the minutes of its January meeting, as traders try to predict the start of the monetary easing cycle.

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