European shares resume slide as earnings disappoint, Italian banks drop
MILAN: European shares resumed their downwards trend on Thursday, hit by some disappointing earning updates including from UK utility Centrica and a fall in Italian banks on continued uncertainty over the outlook for the country's finances.
At 0818 GMT, STOXX 600 fell 0.5 per cent, with most sectors trading in the red following broad-based gains in the previous session that helped the pan-European index bounce from near two-year lows.
Uncertainty over Italian politics, Brexit and worries over slowing economic and earnings growth have discouraged investors from taking risks as central banks take steps to end years of easy monetary policy.
On Thursday, Centrica fell 8.7 per cent to lead losers on the STOXX 600 after its trading update. Analysts at Jefferies said even though the company affirmed some its debt and dividend targets for the year, its earnings per share guidance was 10 per cent below consensus.
Rotork was another big faller in Europe, down 7.1 per cent, following a 4 per cent drop in its order intake.
Telecoms firm Altice slumped 13 per cent after its third quarter core earnings fell nearly 7 per cent due to heavy promotions to win customers.
Italian banks fell 1.9 per cent after Deputy Prime Minister Matteo Salvini said the government would not backtrack on the budget law following a rejection by the EU Commission. Banco BPM was the second-biggest faller in Milan, down 2 per cent.
Bearish bets on a number of Italian banks have increased over the past weeks, reflecting their dim profit outlook and worries over the euro zone's third-largest economy.