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* Siemens Gamesa eyes worst day since 2019
* UK's Avast soars on merger talks with NortonLifeLock
* STOXX 600 1.2% away from record highs
(Updates to close)
By Sruthi Shankar and Susan Mathew
July 15 (Reuters) - Losses on Thursday knocked European
shares 1.2% off all-time highs as a clutch of dismal earnings
and falling bond yields dampened sentiment, while UK-listed
Avast soared 18% on merger talks.
The pan-European STOXX 600 index slipped 1%, with
the oil and gas sector falling 2.7% to a six-month low.
Siemens Energy slid 11.1% after scrapping its
margin target as Siemens Gamesa — its wind power
division — was hit by higher-than-expected raw material and
product ramp-up costs.
Siemens Gamesa was the worst performer on the STOXX 600,
sliding 14.2% and suffering its worst session in two years.
Oil majors Royal Dutch Shell and BP fell
more than 2% as crude prices dropped on expectations of more
supplies.
Losses in Europe were broad-based, with economically
sensitive stocks like banks, automakers, and
travel down between 0.3% and 1.6% as investors grew wary
of rising COVID-19 cases across the continent.
Official data showed that the United Kingdom reported the
highest daily increase in COVID-19 cases since Jan. 15.
A rally in bonds, considered safer assets, gave further
evidence of market caution.
"There has been a little bit of a review of the growth story
that we've all been expecting," said Jonathan Bell, chief
investment officer at Stanhope Capital.
"We can see that there is at some point going to be monetary
policy tightening given inflationary pressures. The ECB and BoE
are saying not yet, but it is clearly starting to come into
conversation," he said, adding that renewed increases in
COVID-19 infections and restrictions are also having an overall
impact on markets.
Economic recovery optimism and a strong start to the
earnings season had seen the STOXX 600 hit a record high on
Tuesday.
UK-based cybersecurity firm Avast Plc posted its
best session on record after the company said it was in advanced
talks on a merger with peer NortonLifeLock Inc.
But analysts warned against euphoria.
"The UK's already very modest-sized technology sector can
ill-afford to lose one of its leading constituents," said Danni
Hewson, financial analyst at AJ Bell. "The current surge in
takeover activity could have a materially negative impact on the
depth, breadth and diversity of the UK stock market.
The FTSE 100 dropped 1.1%, with data showing the
number of employees on British company payrolls surged in June
by the most since the start of the pandemic.
Online fashion retailer ASOS tumbled 18% after it
said sales growth slowed in June and higher costs did not
translate to higher prices for consumers.
(Reporting by Sruthi Shankar and Susan Mathew in Bengaluru;
editing by Uttaresh.V and Mark Heinrich)
