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European shares down on poor earnings, Deutsche Bank suffers

Thu, 02nd Feb 2017 09:56

(ADVISORY- Follow European and UK stock markets in real time onthe Reuters Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets)

* STOXX 600 index falls 0.2 percent

* Deutsche Bank and Kesko among top fallers

* Nokian features among biggest gainers

By Atul Prakash

LONDON, Feb 2 (Reuters) - European equities fell onThursday, with companies such as Germany's Deutsche Bank and Denmark's Novo Nordisk leading thebroader market lower after their results failed to cheerinvestors.

The pan-European STOXX 600 index fell 0.2 percentby 0918 GMT after gaining 0.9 percent in the previous session.

The European auto index, down 1.2 percent, was thebiggest sector decliner as Mercedes maker Daimler fell 4 percent after its fourth-quarter results missedexpectations, hampered by slowing U.S. and China auto marketgrowth as well as persistently weak truck demand.

Among the top fallers, Deutsche Bank fell 5.4percent after posting a net loss of 1.9 billion euros ($2.05billion) in the fourth quarter as legal costs for past misdeedsoutstripped gains from a rebound in bond trading.

"The bank is still undergoing a significant restructuringprocess and ... the numbers don't really shed any further lighton whether the bank will need to raise extra capital, in orderto meet future international bank liquidity rules," said MichaelHewson, chief market analyst at CMC Markets.

Drugmaker Novo Nordisk dropped 6 percent after the world'stop maker of diabetes drugs said fourth-quarter operating profitcame in below forecasts, while Kesko fell 5.9 percent afterreporting net sales of 2.77 billion euros, against a Reuterspoll of 2.95 billion.

However, the overall earnings picture stayed positive.Thomson Reuters data shows one-fifth of the firms in the STOXX600 have announced fourth-quarter results so far, of which 57percent have beaten forecasts and 4 percent have met. Theirearnings in the quarter are seen up around 10 percent from thesame period of 2015.

Aberdeen Asset Management also faced sellingpressure, with its shares falling 4.4 percent after the companysaid that total assets dropped 3 percent to 302.7 billion pounds($383.22 billion) in the first quarter as fresh outflows afterthe U.S. election overshadowed market gains.

Bucking the downward trend was Finnish tyre maker Nokian, which rose 5 percent after reporting a rise infourth quarter operating profit.

Reckitt Benckiser was up 3 percent after announcingthat it was in advanced talks to buy baby formula maker MeadJohnson Nutrition in a $16.7 billion deal.

"The market's initial reaction to the deal is positive, andwe can see why. RB's track record of reinvigorating brands is astrong one, and they already have strong sales links intopharmacies and supermarkets globally," said Steve Clayton, afund manager at Hargreaves Lansdown.

European shares got little direction from overseas markets.Asian equities touched four-month highs after the Fed stuck toits mildly upbeat economic view but gave no hint of acceleratingrate hikes. (Editing by Richard Lough)

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