Apple puts a brake on European shares, eclipses China data
* FTSEurofirst down 0.2 percent * Apple's revenue outlook dents tech stocks * Easyjet sales boost airlines * China PMI improves miners' demand outlook By David Brett LONDON, Jan 24 (Reuters) - European shares dipped on Thursday after weaker-than-expected results from U.S. giant Apple fanned earnings worries in the technology sector, offsetting more bullish economic data out of China. By 0836 GMT, the FTSEurofirst was down 1.71 points, or 0.2 percent at 1,165.64. The index has been trading in a tight 10-point range since nearing two-year highs at the start 2013. The market was jittery after the world's largest tech company Apple reported weaker-than-expected revenues for a third straight quarter. Apple's earnings eclipsed data showing accelerating growth in China's factory sector, although that did provide some support for the basic resources sector which outperformed the broader index, rising 0.2 percent. Tech stocks were down 0.6 percent with ARM, whose chip designs are used in many of Apple's products, falling 1.4 percent. "Apple's outlook is weighing on sentiment in the tech sector and the wider market this morning," Jawaid Afsar, a sales trader at Securequity, said. "Markets have run up well and a pause for breath is to be expected. All the major benchmarks are looking overbought and any short-term correction will be seen as a buying opportunity but the longer-term trend is still to the upside," he said. Apple's downbeat outlook took the shine off an otherwise solid start to the earnings season in the U.S. and in Europe. Although early days in the reporting season, 75 percent of U.S. companies that have reported earnings have either beaten or met expectations. On average their earnings grew 14.7 percent in the fourth quarter from a year earlier. In Europe, 80 percent of companies reporting so far have either beaten or met expectations, although reported year-on-year fourth quarter earnings have contracted by 0.8 percent on average, according to Thomson Reuters Starmine data. Earnings news in Europe on Thursday was positive with UK budget airline EasyJet posting strong quarterly revenue growth, sending its shares up 3.6 percent. That helped pushed up shares of competitor Ryannair by 2.5 percent. Expectations that earnings from Dutch consumer electronics maker Philips' could beat market expectations when it reports helped lift the company's shares 1.5 percent to 22.095 euros. UBS upgraded Philips to "buy" from "neutral". "We raise our price target on Philips to 24 euros from 19.50 euros to reflect higher earnings forecasts, higher anticipated sustainable growth rates and our belief that the group could surprise positively on margins in coming quarters," UBS analysts said. While European shares were weaker losses were limited and there was some relief after the U.S. House of Representatives voted to raise the federal debt limit. "Action by U.S. lawmakers goes someway in soothing worries ... although just kicking the can down the road, it does restore some lost faith in U.S. politicians, and traders are now hopeful that lawmakers can address the remainder of the issues much sooner than some had expected in the market," Ishaq Siddiqi, Market Strategist at ETX Capital, said.
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