European shares extend losses as earnings worries mount
LONDON, April 16
LONDON, April 16 (Reuters) - European shares fell for a third straight session on Tuesday as weak German data and a lacklustre update by luxury group LVMH heightened concerns about the earnings outlook for European companies.
The FTSEurofirst 300 index of top European shares provisionally closed down 0.7 percent at 1,166.56 points, after losing 1.5 percent in the previous two sessions.
Disappointing ZEW German consumer confidence numbers did little to inspire confidence among investors who have taken a more conservative approach to buying equities in recent weeks.
"Today's ZEW highlights the fact that there's nothing to expect from Europe this year, and earnings forecasts for the region are still too optimistic. We think that profits will be down 4.5 percent on the year," Natixis investment strategist Benoit Peloille said.
Corporate earnings in Europe are expected to grow by 6.3 percent in 2013, according to Thomson Reuters I/B/E/S.
Recent data out of the U.S. and China has heightened worries that demand from outside Europe will fail to make up for weakness within the region and see European corporates miss earnings expectations.
Luxury goods companies fell 1.6 percent after LVMH's first-quarter update dented sentiment in the sector.
Utilities were the biggest sectoral decliner in Europe, down 2.0 percent as traders pointed to falling power prices after the EU Parliament rejected a draft law to remove carbon permits from the emission trading system.
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