Black Friday Sale! Save huge on InvestingProGet up to 60% off

European shares fall for fourth day; Nokia slumps

Published 02/11/2011, 07:33 AM
Updated 02/11/2011, 07:36 AM

* FTSEurofirst 300 index down 0.4 percent

* Nokia drops after it unveils new strategy

By Brian Gorman

LONDON, Feb 11 (Reuters) - European shares fell on Friday, extending the week's declines for a fourth successive day, with uncertainty in Egypt worrying investors and phone maker Nokia dropping in reaction to the announcement of its new strategy and a tie-up with Microsoft.

At 1210 GMT the pan-European FTSEurofirst 300 index of top shares was down 0.4 percent at 1,164.41 points, after ending lower on Thursday on disappointing results news.

The European benchmark is still up more than 80 percent from its lifetime low hit in March, 2009.

"The Egyptian situation as yet seems unresolved, and it isn't just about Egypt. Some of the underlying issues such as food price inflation are causing discontent in other places, which has the potential to be disruptive especially in countries where food is a big part of what consumers spend their money on," said Bill Dinning, head of strategy at Aegon Asset Management in Edinburgh.

But he added: "The big picture is still one of a lot of support for the equity markets. Corporations are still making money, monetary policy has been supportive and the German economy is booming."

Nokia slumped 10 percent after saying it had teamed up with Microsoft to take on Google and Apple in the fast-growing smartphone market but that 2011 and 2012 would be "transition years", fuelling fears of a negative impact on margins.

Nokia said its operating margin would be "10 percent or more" after the transition period, compared with a margin of 7.5 percent for 2010.

"Given that the people who were positive on the stock were looking for mid-teens devices margins by 2012, we can see some cuts to estimates," Richard Windsor, global technology strategist at Nomura said.

L'Oreal fell 5.3 percent after fourth-quarter comparable sales below forecasts.

ThyssenKrupp, Germany's biggest steelmaker, lost 2.5 percent after announcing rising losses at its new U.S. and Brazilian plants.

Heavyweight financial stocks to fall included AXA, and Barclays, down 2.1 and 1.7 percent respectively.

Credit Suisse fell 1.4 percent, following a 5.8 percent fall on Thursday, when it reported below-forecast profit.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC40 fell between 0.2 and 0.9 percent.

MICHELIN DRIVEN HIGHER

On the upside, French tyremaker Michelin gained 2 percent after results beat forecasts. Legal & General rose 3.5 percent after a bullish broker note from Nomura.

Portuguese fuel and oil company Galp Energia rose 1.9 percent after posting adjusted fourth-quarter net profit at the top end of expectations.

"We find that in the case of U.S. companies, the results season has been unambiguously strong at both the top and bottom lines," said HSBC strategists in a note. "In Europe, we find a consistent message with the U.S. on the top line but a more mixed message on EPS, where upside and downside surprises have been broadly equal. "

"We maintain our positive stance on global equities and continue to prefer the US over Europe."

Egypt's army said on Friday it would lift emergency law, promised a free presidential election and guaranteed other concessions to protesters but signalled it now wanted them off the streets. The comments came after President Hosni Mubarak enraged protesters by handing powers to his vice president, Omar Suleiman, instead of quitting office now. (Additional reporting by Joanne Frearson; Editing by Greg Mahlich)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.