European shares stumble as the week closes, on downbeat notes from BA-owner, IAG, RBS and others. As Kirsty Basset reports, only 40% of companies have printed revenues above estimates so far - and the macro picture is also depressing the mood.
European earnings season is now in full swing. But out of 75 companies in the STOXX 600, only 40 per cent have reported revenues above estimates, compared with an average of 55 per cent. British Airways owner IAG is one of them. It slightly beat earnings estimates, but it wasn't enough for markets - its shares fell 4.7 per cent. It says overall demand is weakening in light of factors such as the Brussels attacks, and plans to slow its expansion plans. (SOUNDBITE)(English) MARKET COMMENTATOR, ADMIRAL MARKETS, DARREN SINDEN SAYING: "The markets have been slightly unfair to IAG. And it may be that markets have got slightly carried away and the level of expectation has risen too far and it's coming back to some sense of normality. If you look at how IAG's performed against the peer group, it's actually done marvellously." RBS also fell after its losses more than doubled compared to the same period last year. Shares were down 2.6 per cent. It ends a week in which the Bank of Japan shocked investors by holding interest rates steady - and poor U.S. growth numbers. (SOUNDBITE)(English) MARKET COMMENTATOR, ADMIRAL MARKETS, DARREN SINDEN SAYING: "And that does cast out on the strength of the U.S economic recovery and questions about whether the Fed will be able to raise rates at all in 2016 which in turn makes markets think we might be marooned in a low to negative interest rate policy land for some considerable time to come." Leading some to ponder whether central banks have reached the limits of their effectiveness.