* STOXX 600 down 0.4 pct
* Ericsson sinks 11 pct after forecast cut
* IG Group jumps 7 pct as profit rises
* Slower sales growth sends Zalando down 7 pct
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By Helen Reid
LONDON, July 18 (Reuters) – European shares fell on Tuesday
following disappointing results from bluechips Ericsson and
Lufthansa, while scaled-back expectations of monetary tightening
by major central banks spurred some profit-taking in financials.
The pan-European STOXX 600 was down 0.3 percent as
the basic resources sector fell more than 1 percent.
Ericsson dropped 11 percent after cutting its
forecast for the mobile infrastructure market and reporting a
wider than expected loss, a further blow to a company that is
undertaking cost cuts.
“A more challenging market and consensus estimates likely to
fall significantly for 2017, we believe, will weigh,” said UBS
Nokia shares fell 2.9 percent as investors read
across to the Finnish mobile equipment maker.
Banks were down 0.5 percent, after comments from
Federal Reserve and European Central Bank policymakers that
pointed to a slower rate of tightening on both sides of the
Atlantic than many investors were expecting.
Zalando weighed on the retail index after
it reported slowing sales growth. Europe’s biggest online-only
fashion retailer said capacity issues at new warehouses held
Zalando launched a loyalty program, Zalando Zet, which
analysts at Baader Helvea said was its answer to Amazon Prime.
The broader euro zone earnings picture was expected to
weaken slightly in the third quarter as analysts see a stronger
currency likely weighing on the bloc’s large exporting
“We do think that the scope for earnings to beat
expectations has been reduced due to the currency headwinds –
historically euro weakness has provided a driver for earnings
beats and with that removed, expectations may be more difficult
to surpass,” said Edward Park, investment director at Brooks
German airline Lufthansa fell 2 percent from
10-year highs, the worst DAX performer, despite upping its
profit forecast after a bumper summer of bookings.
Traders had expected the stock to rise 1 to 2 percent.
Analysts at Liberum said cautious second-half comments from
management might explain the move lower.
UK peers International Consolidated Air and EasyJet
were among top FTSE 100 losers.
Norwegian fertiliser company Yara fell 4 percent
after its quarterly earnings were dented by a squeeze in
“We believe this has been Yara’s darkest quarter and see an
improving trend with urea prices ticking up in the U.S. and
Egypt recently,” said Liberum analysts.
Among shares boosting the index, British spread-betting firm
IG Group was up 8 percent, leading gainers after
reporting an increase in annual profit that beat analysts’
Britain’s second largest listed property developer British
Land jumped 2.7 percent and was among the top
performers on the STOXX 600 after announcing a 300 million pound
Analysts at Morgan Stanley last week predicted European
share buybacks would accelerate as corporates react to a happy
combination of better economic growth and solid balance sheets.
(Reporting by Helen Reid, Editing by Vikram Subhedar and John