EU indices fall on Libya and Middle East concerns despite earnings

Traders continued to sell out of European equities on Wednesday despite strong earnings from Standard Chartered as continued unrest in Libya and the Middle East hampered buying activity.

Since around 3pm yesterday all we have seen is traders selling out of positions and the fact that investors have been so keen to lock in profits after a somewhat small recovery from last Thursday is alarming for bull enthusiasts.

The FTSE 100 Index has lost 2.2% in the last 4 hours of trading, with heavyweight mining companies the key drag on the UK Index and typifying the low appetite for risk that exists amongst traders with the crisis in North Africa and the Middle East still firmly in the headlights. The gain in the price of crude oil is posing a sincere threat to company earnings and inflation in the near term and as such, investors are naturally concerned. This is why we have seen traders react to events in Libya and more recently Saudi Arabia with such high sensitivity.

Standard Chartered shares rally on record start to the year
Of some of the individual stock performances today, Standard Chartered Bank is one of the standouts, with the bank reporting a 19% rise in profits, and saying that 2011 has been a record start to a new year already. The bank is heavily weighted towards exposure in Asia, with more than 80% of total profits emanating from the region. It said that January has already been a record month with strong performances in China and India. The bank expects revenues to grow by at least 10% this year and the news has helped to boost investor optimism, particularly having seen shares of Standard Chartered lose some 18% since early November last year. The bank’s shares have traded higher by 3% today, making it the best performing stock on the FTSE 100.

HMV shares hit new low of 14.75p 
Shares of troubled retailer HMV Group hit a new low this morning, falling another 4% to add to yesterday’s 19% decline, hitting a low of 14.75p as traders continued to fret about the future of the retailer in the midst of yesterday’s profit warning and speculated sale of assets including Waterstone’s.

Whitbread shares lose after slowing sales at Premier Inn
Investors sold out of Whitbread shares this morning after the firm reported that sales growth at budget hotelier Premier Inn was slowing. Sales have slowed from 8.7% to 5.1% in the last 11 weeks to mid February, raising concerns that consumer spending could continue to retrace in the midst of austerity measures that has yet to bite.