Dividend cuts weigh on European shares
LONDON Feb 20 (Reuters) - European shares fell on Wednesday as surprise dividend cuts by RSA and Lufthansa and weak results from the likes of Accor and BHP Billiton weighed on sentiment.
The FTSEurofirst provisionally closed down 3.65 points, or 0.3 percent, at 1,168.08.
Britain's biggest business insurer RSA was the biggest individual faller after it unexpectedly cut its dividend by a fifth after weak investment returns, sending its shares down 14.9 percent.
"There would have been a lot of income funds invested in the stock purely on the basis of its dividend, so they would have been selling out of it today, but once it settles down investors will realise that it was a sensible move," Paul Mumford, a fund manager at Cavendish, said.
The announcement had a knock on effect within the insurance sector with Aviva down 4.4 percent as Markit downgraded its dividend forecasts for the company by up to 19 percent.
While Europe's biggest airline Lufthansa shed 6 percent after stunning markets by witholding a dividend for the second time in three years.
Telecoms, which have the highest dividend expectations in Europe -- analysts forecast a 6.1 percent yield in the sector over the coming 12-months -- fell 1.3 percent.