Thyssenkrupp Shares Slide, UK GDP Surprises: European Markets React to Earnings and Economic Data
European markets had a rocky session on Thursday, with major indices across the continent trading lower for a second consecutive day. Investor sentiment was shaken by a mix of underwhelming corporate earnings and economic data. Notably, the UK’s FTSE 100 and FTSE 250 dipped despite surprisingly strong GDP growth figures. While the U.K. economy expanded by 0.7% in the first quarter—outpacing forecasts—economists warned that the surge might be short-lived. Meanwhile, markets were also digesting continued sluggishness in negotiations between the EU and the U.K., as discussions around youth mobility and fisheries faced major roadblocks.
The standout corporate story of the day came from Germany, where industrial heavyweight Thyssenkrupp saw its shares plunge nearly 10%. The company’s second-quarter earnings came in far below expectations, with adjusted EBIT falling 90% year-on-year to just €19 million. Citi analysts had forecast €172 million, showing just how significant the miss was. Sales declined by 5% and order intake dropped 6% year-on-year, reflecting the impact of weak market demand and macroeconomic uncertainty. Even though the company stuck to its full-year guidance, the poor performance sent a clear signal of ongoing challenges in Europe’s industrial sector.
Other corporate updates showed a mixed picture. Siemens beat expectations on both sales and profit but kept its outlook unchanged, citing growing economic uncertainty. Merck KGaA, on the other hand, lowered its full-year earnings forecast, blaming geopolitical risks and U.S. tariff policies. The company warned that the unpredictability of global markets, especially the back-and-forth nature of U.S. trade policies, could continue to weigh on performance in 2025. Both companies reflect how macroeconomic and political instability are beginning to squeeze even the most established firms.
Back in the U.K., the better-than-expected GDP figures were a welcome surprise for Chancellor Rachel Reeves and the Labour government, especially after several quarters of sluggish growth. Reeves called the numbers a sign of the UK economy’s “strength and potential,” noting that the country outpaced other G7 members in Q1. However, analysts believe the performance was driven by temporary factors such as trade front-loading ahead of tariff changes and tax adjustments. Most agree that growth will likely soften in the second half of the year, especially if global economic conditions worsen.
Investor caution was also visible in early trading across Asia and the U.S., where markets responded to the shifting dynamics of U.S.-China trade talks and awaited key economic data. While the S&P 500 had recently posted gains, futures slipped slightly overnight. In Asia, major indices like Japan’s Nikkei and South Korea’s Kospi declined, reflecting broader market unease. Overall, Thursday’s trading session highlighted how sensitive global markets remain to both corporate performance and geopolitical developments. Between weak earnings, volatile trade policies, and cautious optimism about economic recovery, it’s clear that confidence is still fragile.
Source: CNBC