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* BP surges after results, lifts energy sector
* Investors await details on U.S. fiscal stimulus
* Defensives sectors drag markets lower
* Diageo slides after weaker-than-expected FY sales
(Adds comment, updates prices)
By Sruthi Shankar
Aug 4 (Reuters) - European shares slipped on Tuesday as
disappointing earnings reports from Diageo and Bayer took the
shine off a jump in growth-linked cyclical stocks, while
investors awaited signs of progress on more U.S. fiscal
stimulus.
The world's largest spirits maker, Diageo Plc, slid
6.3% as it reported a bigger-than-expected decline in underlying
net sales across all markets except North America, bucking a
trend which has seen alcohol producers propped up by supermarket
sales during lockdowns.
German drugs and pesticides group Bayer also fell
3.6% as moves to settle lawsuits over its Roundup weedkiller
helped drive a 9.5 billion euro ($11.2 billion) loss.
Energy major BP by contrast jumped 7% as it used
results to bring forward plans to speed its reinvention as a
lower carbon company, funded in part by $25 billion in asset
sales by 2025.
Oil & gas led gains among industrial sectors with a
2.4% rise, while automakers and banks rose
between 1.5% and 2%.
The pan-European STOXX 600 slipped 0.2% overall,
with UK and German stocks both down.
After a stunning recovery since March lows that has seen the
STOXX 600 climb nearly 36%, European stocks have wobbled in
recent weeks on concerns about a resurgence in coronavirus
cases.
"We're already trading at high levels in equity markets,
from here on it's going to be more challenging," said Elwin de
Groot, head of macro strategy at Rabobank.
"The economy has been recovering in the last couple of
months, but it remains to be seen whether activity can make
headway, given the geopolitical situation and in some areas new
lockdowns, although targeted, are being implemented."
Doubts over the progress of a U.S. coronavirus aid package
and a diplomatic tussle over Chinese tech companies' operations
in the United States also kept investors on edge.
Banking-heavy Italian and Spanish indexes
were both higher, as data showed Italy standing out as the main
beneficiary of the European Central Bank's efforts to support a
virus-stricken euro zone economy.
Of the 57% of companies listed on the STOXX 600 that have
reported so far, nearly 62% have topped analysts' much-reduced
expectations for results, according to Refinitiv data.
Chipmaker Infineon jumped 4.7% after its CEO
Reinhard Ploss signalled "concrete signs of recovery within the
automotive sector".
Hugo Boss gained 2.8% as it said it had returned
to strong growth in China in June and saw online sales jump 74%
in the second quarter.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Rashmi
Aich and Patrick Graham)