* Unilever on course for worst fall since August 2015
* Hard Brexit fears dampen UK domestic stocks
* Safran down on Boeing 737 MAX production halt
(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
By Sruthi Shankar
LONDON, Dec 17 (Reuters) - European shares pulled back after
a record run on Tuesday as a sales warning from Unilever
prompted investors to sell big consumer names, while concern
that Britain will take a hard line on the Brexit transition
dragged down UK domestic stocks.
The pan-European equities index fell 0.6% after
soaring to record highs in the previous session.
The biggest weak spot was consumer goods giant Unilever
. Its shares tumbled 6%, on course for their
biggest percentage drop since July 2015, after the company
warned that 2019 sales would grow less than it had expected,
citing tough trading conditions in West Africa and a slowdown in
south Asia.
Europe's personal and household goods sector fell
2.1%, the most among regional subsectors.
"With Unilever, it's a combination of technical breakdown on
the charts, you've got the warning and the time of the warning
is not ideal because the markets have already been rotating out
of big UK defensive names," Mark Taylor, sales trader at
Mirabaud Securities.
Taylor, however, suggested Tuesday's broader market moves
were "just reassessing some of the outsized moves that we've
seen in the last few days."
Global equity markets reached record highs on Tuesday,
encouraged by phase one of a trade agreement between the United
States and China and by Boris Johnson's victory in UK elections
last week, which raised hopes for an orderly exit by Britain
from the European Union.
Domestically focused UK stocks, also at record
highs, succumbed to selling pressure on Tuesday after reports
that Johnson would use his control of parliament to rule out any
extension of the Brexit transition beyond 2020.
British banks Royal Bank of Scotland, Barclays
and Lloyds Banking Group slid more than 3%.
London's blue-chip index, the FTSE 100 held steady,
aided by a weaker pound. The latest data showed Britain's
employers unexpectedly took on more staff in the three months
before the country's Oct. 31 Brexit deadline, suggesting the
labour market was retaining some of its strength.
Airbus rose 0.5% after Boeing said it would
suspend production of its 737 MAX jetliner in January. Shares in
aircraft-parts maker Safran fell about 4%.
Ryanair, Air France and Lufthansa
were all weaker as well.
Shares in Austrian specialty steelmaker Voestalpine
fell 3.1% after it cut its full-year profit forecast
and said it planned to lower its dividend payment.
German defence group Rheinmetall was the top
gainer on the STOXX 600, up 2.3%, after Goldman Sachs started
coverage with a "buy" rating.
(Reporting by Sruthi Shankar in London, editing by Gareth
Jones, Larry King)
Barclays (BARC)
Lloyds (LLOY)
Unilever (ULVR)
