Google fined, markets lower | Calamatta Cuschieri

Global markets were in the red on Tuesday as investors turned their attention to European Central Bank president Mario Draghi for clues on the path ahead for interest rate normalisation. Draghi said the ECB’s stimulus policies are working and will be gradually withdrawn as the economy accelerates.

European markets were lower by Tuesday afternoon, feeling the weight of a rising euro, as profit warnings and merger concerns pulled regional equities towards their lowest level in nearly two weeks. A stronger Euro can hurt shares of European exporters since it can make their products more expensive for clients overseas to purchase.  

US stocks tried to push into positive territory during early trading, but were mostly trading at break-even levels, as investors buying in energy and financials were offset by selling in telecom stocks, with the tech-heavy Nasdaq under pressure for a second straight session.

Banks in the spotlight

The Bank of England has told British banks to raise their capital requirements on growing domestic and external risks.

British banks will have to increase their capital buffers by £11.4 billion to protect them from economic risks related to Brexit, growing consumer credit and external shocks, such as a slowdown in China. 

Banks traded higher, as the banking sector rose 0.66% on this news. Barclays was up 1.63% and Lloyds added 0.50%. HSBC and Royal Bank of Scotland were also trading in the green.

Autos struggle

Auto stocks were among the poorest performing sectors, down 1.6% on Tuesday. German automotive supplier Schaeffler plunged 11% to the bottom of the benchmark after posting disappointing second-quarter 2017 earnings and cutting guidance, blaming higher steel costs.

Continental, BMW, Peugeot and Renault all traded in the red.

Google slapped with record fine

It was a bit of a rough day at the office for Google, after EU regulators slapped the company with a €2.4 billion fine, ruling that the search engine giant violated antitrust rules for its on-line shopping practices. The fine is the largest by Brussels for a monopoly abuse case and follows a seven-year long investigation.

This was triggered off after the European Commission received dozens of complaints from US and European competitors, who claimed that the company abused its search market dominance to give its Google Shopping service an advantage over other retailers and created a monopoly over consumers.

Google parent company Alphabet Inc. has 90 days to “stop its illegal conduct” and give equal treatment to rival price comparison services, according to a binding order from the European Commission on Tuesday. Failure to comply brings a risk of fines of up to 5% of its daily revenue. Shares in Alphabet Inc. dropped 1% on this news.

Among other tech names, Facebook shares were down 1.57% and Netflix lost 1.5%.

Disclaimer:

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.