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Europe: Shares retreat from multi-year highs, Casino and Pearson dip
[LONDON] European equities retreated from 14-year highs on Thursday, led lower by shares in French retailer Casino, which reported slower sales growth, and Pearson, on a report that one of its educational technology projects was in trouble.
Casino's stock dropped 4.6 per cent after Societe Generale and Natixis cut their target prices, and Pearson fell 4 per cent on a report the Los Angeles Unified School District was seeking a refund from Apple over a bungled US$1.3 billion iPad plan with a curriculum from Pearson.
The pan-European FTSEurofirst 300 index closed 0.9 per cent lower at 1,635.76 points after gaining 0.6 per cent on Wednesday to reach levels not seen since late 2000.
Germany's DAX, down 1.9 per cent, underperformed the wider market, after a recent sharp rally and as the euro gained against the dollar. A stronger local currency is generally seen negative for export-oriented companies.
The DAX index rose 22 per cent in the first quarter, against a 15-per cent gain for the wider stock market. "The DAX is just taking a breather after a stellar run on the back of a depressed euro, ultra-low interest rates and the quantitative easing programme," B Capital Wealth Management managing director, Lorne Baring, said. "Valuations are still reasonable and we see a 10 per cent upside for the index in the next six months," he said.
Greece was still a risk factor for European stock markets, he said.
Greece's benchmark ATG share index fell earlier in the day on a Financial Times report saying the International Monetary Fund had rebuffed a request from the country to delay loan repayments. Greece later denied the report.
The ATG rose 1.1 per cent after Prime Minister Alexis Tsipras told Reuters he was "firmly optimistic" his government would reach an agreement with foreign creditors by the end of April despite friction over issues such as pension and labour reform.
Among standout losers, Diageo, the world's largest spirits maker, fell 3.6 per cent after saying net sales in the three months to March 31, the third quarter of its financial year, fell 0.7 per cent.
Mid-cap British utility company Telecom Plus sank nearly 20 per cent after saying it would write down about 11 million pounds of unrecoverable bills at its gas unit and that it expected full-year pretax profit to be "significantly below market expectations".
Bucking the trend, Unilever rose 2.4 per cent after reporting better-than-expected sales for the first quarter.