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Europe: Shares drop as Carrefour, WPP results get frosty reception

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[LONDON] European shares slid on Thursday as a flurry of uninspiring earnings updates from retailer Carrefour and advertiser WPP kept the mood downbeat, while broader jitters over tightening monetary policy spilled over into March.

The pan-European STOXX 600 index was down 0.5 per cent in early deals, while Germany's DAX fell 0.7 per cent Britain's FTSE felt the weight of Brexit uncertainty with a 0.3 per cent loss.

Results were squarely in focus, with shares in French supermarket Carrefour dropping 6 per cent after the group cut its dividend amid a cautious outlook for 2018 profitability.

Retailers have struggled in the face of Amazon's rise and adapting to a tech-led world.

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Plans by fast-fashion company Zalando to expand into two new markets were not met well by the market, with its shares also falling around 3.8 per cent as investors assessed the impact of such heavy investment.

Elsewhere the UK's Carpetright slumped 23 per cent after the firm said that it was in talks with lenders about shoring up its balance sheet, following a profit warning at the end of January.

Another firm which has struggled in a digital age was advertiser WPP, whose shares dropped 11.7 per cent after it said that it would simplify its structure after posting its worst performance since the financial crisis as consumer goods firms cut their spending on advertising.

On the positive side, shares in beer giant Anheuser-Busch InBev jumped 5.7 per cent after its fourth quarter profit beat expectations than expected thanks to a rebound in Brazil and savings from its 2016 purchase of SABMiller.

REUTERS