Europe open: Shares down on weak US earnings; Luxury stocks weigh

(Sharecast News) - European shares opened lower om Wednesday as investors eyed eurozone manufacturing survey data and regional bank earnings. The pan-European Stoxx 600 index was down 0.71% at 512 with most major regional bourses lower. Sentiment was also hit by after disappointing corporate corporate earnings from Wall Street heavyweights overnight.

In after-hours trade in the US, Tesla shares fell sharply after the electric carmaker said net profits fell 45% in the second quarter, while Google parent Alphabet disappointed with slowing ad sales growth. In other news, Visa, UPS and GM also underwhelmed investors with their latest numbers.

"As such, two of the Magnificent 7 stocks failed to create euphoria when they reported their Q2 results yesterday. The less-than-ideal set of earnings comes at a time when investors are questioning whether the AI rally has gotten ahead of itself," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

In economic news, consumer sentiment in Germany has risen to its highest level in more than two years, according to a closely watched survey from GfK and the Nuremberg Institute for Market Decisions (NIM), as income expectations and the economic outlook improved significantly.

The GfK Consumer Climate index for August increased to -18.4, up from a revised -21.6 in July and ahead of the -21.0 expected by economists. This was the highest reading since April 2022.

On the equities front Deutsche Bank shares fell after its latest earnings report.

Luxury stocks were all down, with LVMH, Hugo Boss, Christian Dior and Kering all lower.

Reporting by Frank Prenesti for Sharecast.com