[LONDON] European shares slipped on Wednesday as some weak earnings reports pushed the market lower after two days of gains.
The pan-European FTSEurofirst 300 index and the European STOXX 600 index ended both down by 0.45 per cent.
Among the worst performers was outdoor advertising group JC Decaux. The stock slumped 10 per cent after a weak second-quarter outlook led several investment banks to cut their ratings and price targets on the shares.
Austria's Raiffeisen Bank also dropped by 10 per cent on concerns over its plans to merge with its unlisted parent company Raiffeisen Zentralbank.
However, shares in Norwegian publishing company Schibsted surged 12.2 per cent after the company reported first-quarter core earnings above expectations.
Thomson Reuters StarMine data show 60 per cent of companies on the STOXX 600 index have met or beaten forecasts with their quarterly earnings so far, in many cases by cutting costs to offset falling revenues.
But the FTSEurofirst 300 index is down nearly 10 per cent so far in 2016, "I'm still in the bearish camp, and I think that any rallies on the market are for selling. Some company results have beaten expectations, but you have to remember by just how much some of these expectations had already been lowered," said Terry Torrison, managing director at Monaco-based McLaren Securities.
Shares in Banco Popolare fell 9 per cent to a record low. The Italian bank reported an unexpected first-quarter loss Tuesday night because of loan writedowns, the main concern over Italian banks.
Poste Italiane fell 2 per cent after Italian economy minister Pier Carlo Padoan said the government may sell some of its 65 per cent share in the recently listed post office.
A trader at an Italian bank said current market conditions mean the sale might happen in September.