Weak earnings hit European shares

European shares fell yesterday as weak corporate earnings weighed on investor sentiment. The pan-European FTSEurofirst 300 index slid 0.8 per cent and fell 2.7 per cent over the course of the week, its worst weekly drop since early September.

The possibility of an interest rate rise in December in the US has prompted caution among investors and a series of lacklustre earnings updates have not helped the mood.

Data from Thomson Reuters StarMine shows that half of the companies on the European STOXX 600 index have missed market expectations with their third quarter results so far.

DUBLIN The Iseq finished almost flat, ending the session down 0.1 per cent on the previous day’s closing level, in a sluggish day’s trading to round off the week.

There were contrasting fortunes for its two biggest stocks, with building materials group CRH rising 1.4 per cent to €25.13 and Ryanair finishing at €14.40, down 0.7 per cent.

Agri-food group Origin Enterprises was among the climbers, adding 2.7 per cent to €6.99, while drinks group C&C finished at €3.70, up 1.1 per cent, and paper and packaging group Smurfit Kappa rose 0.7 per cent to €25.16.

However, food groups Glanbia and Kerry both fell 1.5 per cent, closing at €17.05 and €71.99 respectively.

Insulation-maker Kingspan dropped 1.8 per cent to €23.68.

LONDON The FTSE 100 Index retreated for a second day, ending down 1 per cent. The blue- chip index finished the week at its lowest level since October 1st.

Among the declining stocks, security group G4S lost 3.6 per cent, the most since August, finishing at 227.6 pence after analysts at RBC Capital Markets said it sees multiple challenges heading into next year.

Rolls-Royce Holdings was the biggest faller in the FTSE 100, retreating for a seventh straight day. A drop of 4 per cent yesterday to 513.5 pence, following on from a plunge of almost 20 per cent on Thursday, finished off what was the stock's worst week since at least 1988. The firm this week issued its fifth profits warning in less than two months.

Mining stocks showed signs of recovery after steep declines on Thursday, with Anglo American leading the way with a 1.4 per cent gain to 456.2 pence, and BHP Billiton advancing 0.7 per cent.

EUROPE Investors were in selling mode across Europe, with France’s Cac 40 down around 1.4 per cent on the day, while Germany’s Dax finished 0.7 per cent lower in Frankfurt.

Swiss pesticides maker Syngenta jumped 5.3 per cent after Bloomberg reported that China National Chemical Corp was in talks to buy the world's largest agrichemical company, although its initial offer of nearly $42 billion was rejected.

Ferragamo tumbled 8.1 per cent after the Italian luxury goods maker said meeting market expectations for its 2015 earnings would be a challenge.

Spain's ACS also dropped, by around 3 per cent, after sales and earnings at the construction and engineering company missed expectations.

US Stocks declined in early trading and looked to be on track for their first weekly drop since September, after weaker- than- expected retail sales data added to worries that growth remains uneven.

Retailers led the drop after fashion retailer Nordstrom missed analysts' estimates, sending its shares down 16 per cent. Macy's, which cut its full-year forecast on Wednesday, sank 2.4 per cent, while Ross Stores and Kohl's fell as much as 5.3 per cent.

Fossil Group plummeted 33 per cent to a five-year low after its sales missed analysts' estimates, fuelling concern that the watch industry is mired in a slump and losing ground to wearable technology.

Cisco Systems slumped 6.2 per cent, dragging technology companies lower, after its outlook disappointed. – (Additional reporting: Bloomberg / Reuters)