Stocks

European shares pull back as trading updates disappoint

Reuters London | Updated on January 18, 2018 Published on January 17, 2018

Earnings updates and dealmaking activity drove the biggest share price moves in Europe on Wednesday as the broader market followed US stocks lower following a strong start of the year.

Britain's Informa dropped 5.4 per cent after it made a paper and cash offer to buy UK events organiser UBM, which shot up 16 per cent. Luxury fashion brand Burberry and educational publishing company Pearson were among the top fallers in Europe after disappointing trading updates.

Their losses along with weakness in the heavyweight financial and healthcare sectors dragged the pan-European STOXX 600 index down 0.3 per cent by 0814 GMT. The UK's FTSE also fell 0.3 per cent.

British contractor Interserve tumbled 10 per cent after the Financial Times reported that government ministers are "very worried” and have set up a team of officials to monitor the company following the collapse of competitor Carillion.

Tech was among the few sectors in positive territory, underpinned by a 3.6 per cent surge in ASML.

The Dutch chipmaking equipment supplier posted better-than-expected net profit in the fourth quarter as customers asked for early delivery of products as semiconductor demand booms.

Despite Wednesday's decline, the STOXX remains close to the 2 1/2 year high hit early this month on confidence over the region's economic recovery and the upcoming earnings season.

“Conditions for a recovery of European equities are there but the over-extension of gains on the S&P 500 represent a risk in the short term,” said Anthilia Capital fund manager Giuseppe Sersale.

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Published on January 17, 2018
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