European stocks edged off seven-year highs on Thursday after some disappointing updates from utility Centrica and airline Air France-KLM and as a slide in crude prices hit oil shares.

Centrica’s shares plunged 7.9 per cent, on track for their biggest one-day drop since 2008, after the company slashed its dividend and wrote down the value of some of its exploration and production and power assets following a slump in energy prices.

Shares in Britain’s other large power providers — EDF , SSE, Centrica, E.ON, RWE npower — also fell.

The sector has come under pressure from politicians in Britain in recent months due to years of rising energy bills, with the opposition Labour Party promising to freeze prices until 2017 if it wins a general election this May.

“Much (of Centrica’s impairments) came from the write-down of the oil (assets) but if oil prices don’t continue to go down surely they can write some of it back,’’ Markus Huber, a senior trader at Peregrine & Black, said.

“They managed to make look the figure look poorly because of the election, to take some of the heat off.’’

Oil prices, which had been recovering from five-year lows in recent weeks, tumbled on Thursday as US inventories were expected to hit record highs.

The fall in crude weighed on the oil and gas sector, which was down 1.4 per cent.

While falling fuel prices have been seen as beneficial for airlines, Air France-KLM said on Thursday they were largely offset by overcapacity on some routes and currency swings, prompting the company to ease a key debt reduction goal. Its shares fell 4.7 per cent.

The broader FTSEurofirst 300 index was down 0.2 per cent at 1,512.55 points at 0932 GMT, after hitting a seven-year high in the previous session.

European shares had risen in the previous session on optimism about a deal to extend Greece’s loan agreement. The country is expected to conclude a deal with its euro zone partners “soon’’, its government spokesman said on Thursday.

Greek shares were up 1.4 per cent.

Bucking the trend, Dutch employment services group Randstad Holding NV rose 4.2 per cent after it posted fourth-quarter core earnings slightly ahead of forecasts.

French IT services company Capgemini jumped 5.8 per cent after saying it expects sales to accelerate this year.

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