By Atul Prakash
LONDON (Reuters) – European equities slipped after climbing to a two-week high earlier on Thursday, with some disappointing company results and weaker miners putting pressure on the market.
The pan-European FTSEurofirst 300 (.FTEU3) index was 0.5 percent lower at 1,288.74 points by 0851 GMT after rising to 1,298.16, its highest level since Feb. 5. It had ended 2.7 percent stronger on Wednesday following a rally in oil prices.
Food group Nestle (NESN.VX) dropped 4 percent, the heaviest faller in the FTSEurofirst index, after saying it expected softer pricing in 2016 and growth in line with last year as full-year organic growth of 4.2 percent fell short of expectations.
“It’s a difficult environment for European companies as a meagre growth rate in emerging markets is not helping. Profit margins are under pressure as companies are not able to raise prices, while productivity is edging lower,” said Koen De Leus, senior economist at KBC in Brussels.
About half of the companies in the STOXX Europe 600 index (.STOXX) have reported results so far, of which 53 percent have met or beaten analysts’ forecasts and the rest have missed. The fourth-quarter earnings have fallen 15 percent from the same quarter of the previous year, Thomson Reuters StarMine shows.
Miners also came under pressure after a strong rally in the previous session as some investors booked profits. The STOXX Europe 600 Basic Resources index (.SXPP) fell 2.3 percent, the top sectoral decliner, after surging 8 percent on Wednesday.
Shares in Anglo American (AAL.L), Glencore (GLEN.L) and Rio Tinto (RIO.L) fell 3.5 to 6.2 percent.
On the positive side, AccorHotels (ACCP.PA) rose 5 percent, the top gainer in the FTSEurofirst 300 index, after Europe’s largest hotelier said restructuring efforts and robust demand in most markets except France and Brazil helped it beat expectations.
Franco-Dutch airline Air France-KLM (AIRF.PA) surged 9 percent after beating forecasts with a return to profit last year, helped by a drop in the fuel bill and growth in passenger traffic.
Capgemini (CAPP.PA) also rose 3.2 percent after the French information technology services company reported a 20 percent rise in full-year operating profit and predicted a wider operating margin for 2016.
(Editing by Hugh Lawson)
