European Shares End Flat as Fed Fears, Virus Concerns Weigh

The pan-European STOXX 600 index closed largely unchanged at 471.79 points, following a selloff last week that knocked it off record levels.

Commodity-linked sectors continued to outpace the general market, as oil and metal prices rose on expectations of a recovery in major importer China.

Basic resources stocks were the best performers for the day, rising 2.0%.

Travel stocks also surged nearly 2% after U.S. health regulators granted full approval to the COVID-19 vaccine developed by Pfizer Inc and BioNTech SE in a move that could accelerate U.S. inoculations.

Global stocks wobbled last week after data from U.S. and Asian economies signalled a slowing global economic recovery, as a spike in the Delta variant of the coronavirus prompted fresh restrictions in several parts of the world.

Investors are awaiting U.S. Federal Reserve chief Jerome Powell’s speech at the annual Jackson Hole symposium on Friday for hints on the central bank’s asset purchases tapering plans.

“Since the release of the Fed minutes last week, the consensus for the start of tapering has moved slightly forward, from the beginning of 2022 to December 2021,” Unicredit analysts said.

“A hawkish surprise from Jackson Hole appears less likely and the next topic of major relevance is probably the U.S. labour market report on Sept. 3.”

Meanwhile, German stocks rose 0.3% as data showed Germany’s gross domestic product grew by 1.6% on the quarter from April to June, slightly up from its previous estimate of 1.5%, helped by private consumption and state spending.

Marks and Spencer Group rose 4.1% after Berenberg and Credit Suisse raised their price targets on the UK retailer’s stock.

“Despite it being a moderate environment for UK consumption…, M&S is enjoying favourable positioning, market share gains from peers disappearing,” Credit Suisse analysts said in a note.

Norwegian salmon farmer Bakkafrost gained 1.9% following its second-quarter results.

Novartis slipped 1.7% after the Swiss drugmaker said its Kymriah CAR-T therapy did not meet the primary endpoint in a late-stage study.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Mark Heinrich)

Novartis Posts Q2 Profit Beat, Keeps 2021 Guidance

It generated net profit of $3.72 billion and increased core operating income 18% to $4.35 billion while sales in the three months through June rose 14% to $12.96 billion, a gain of 9% when stripping out currency fluctuations.

Analysts polled by Refinitiv had on average expected net profit of $3.46 billion on revenue of $12.52 billion.

Novartis said its key drug brands were performing well and its product development pipeline continued to progress.

“While demand is starting to return to pre-COVID-19 levels in most geographies and therapeutic areas, we still see a slight impact on parts of our business for example in oncology, generics and certain geographies,” it said.

“We are assuming further easing of COVID-19 restrictions

in the second half of the year with a positive impact on business dynamics.”

It reiterated it expected 2021 sales to grow at a low- to mid-single-digit percentage rate, with core operating income seen growing at a mid-single-digit percentage rate ahead of sales.

(Reporting by Michael Shields, editing by John Revill)

Novartis Q1 Sales, Profit Miss Analyst Expectations Amid COVID-19 Impact

Core net income slipped to $3.4 billion, compared to the $3.5 billion average estimate of nine analysts in a poll by Refinitiv. Sales were 1% higher at $12.4 billion, compared to $12.5 billion forecast in the poll. Net income fell 5% to $2.06 billion.

Novartis confirmed its 2021 outlook, which foresees net sales growing at a low- to mid-single-digit percentage rate, with core operating income expected to grow at a mid-single-digit percentage rate, ahead of sales.

Novartis, like many other drugmakers including cross-town rival Roche, has taken a sales hit for drugs in dermatology, eye diseases and breast cancer treatment areas as people shy away from doctor visits during the prolonged pandemic. That is impacting key Novartis medicines including Cosentyx for psoriasis, Lucentis for macular degeneration, and Kisqali for breast cancer.

“There continues to be COVID-19 related lockdowns and disruptions in several geographies,” Novartis said, adding that the COVID-19 pandemic has also led to a historically weak cough and cold season for drugs made by its Sandoz generics unit.

The Sandoz unit, where sales fell 9% to $2.3 billion in the period, now expects revenue for the full year to decline in the low- to mid-single-digit percentages.

(Reporting by John Miller; Editing by Riham Alkousaa and Michael Shields)