Europe close: Autos under the cosh as stocks fall

European shares fell on Thursday, with car makers under the cosh after results from Tesla failed to impress, while Nordic Semiconductor slumped on revenue declines.

The pan-regional Stoxx 600 closed down 0.2%, while France’s CAC 40 ended 0.1% lower and Germany’s DAX fell 0.6%.

CMC Markets analyst Michael Hewson said: "In what has been a pretty directionless week so far, European markets are on the back foot as a slide in automakers, and lower oil prices weigh on the wider market.

"The negative reaction to last night’s Tesla numbers, along with a pledge to cut prices further has weighed on the European auto sector, with losses for BMW, Renault, Stellantis, and Volkswagen over concerns that already thin margins will get even thinner, as prices get cut further.

"The fact that demand is falling for electric cars isn’t helping either given that the economic case for owning one has declined along with falling petrol prices."

In economic news, German producer prices rose less than expected in March, posting the smallest year-on-year increase since June 2021, according to official data.

Producer prices of industrial products were up 7.5% on the same month last year, the Federal Statistical Office reported, against expectations of a 9.8% year-on-year rise.

Energy prices were still mainly responsible for the year-on-year increase, up 6.8%. Excluding energy, producer prices rose 7.9% in March on the year. Compared to February, prices fell by 2.6%, posting the sixth consecutive decline.

The statistics office added that the results were preliminary and would have to be revised because a price brake on electricity and gas that comes into effect in March distorts calculations.

In equity news, Nordic Semiconductor slid more than 19% as first-quarter sales declined by a fifth.

French car maker Renault also slumped despite reporting a 30% in first quarter revenues due to a rebound in sales and higher prices. The sentiment hit Stellantis and parts maker Faurecia.

The fall in auto stocks followed Tesla results, which showed a drop in net income, and the company’s Tuesday announcement of further price cuts.

Sartorius, the German supplier of lab equipment, tanked after it missed first-quarter estimates.

Nokia tumbled after the Finnish telecoms group posted quarterly operating profit that missed analysts’ expectations.

Bucking the trend, Sweden's Volvo gained as it lifted its outlook for key heavy-duty truck markets in Europe and North America this year as it reported a 32% year-on-year rise in order intake for the first quarter.

Swedish power tool maker Husqvarna rose after it posted record first-quarter results.