Weak corporate earnings peg back European shares
* FTSEurofirst 300 down 0.1 pct, Euro STOXX 50 falls 0.4 pct
* Weak results hit Santander and Unilever
* ECB rate cut expectations still supporting equities
By Sudip Kar-Gupta
LONDON, April 25 (Reuters) - European shares paused on Thursday after four straight sessions of gains, with disappointing earnings reports from Santander and Unilever among others helping peg back equity markets.
However, traders said that expectations of more central bank action to support the euro zone economy would prevent any major pull-back on European stock markets in the near term.
The pan-European FTSEurofirst 300 index, which had risen for the last four sessions, eased back 0.1 percent to 1,190.33 points, while the euro zone's blue-chip Euro STOXX 50 index slipped 0.4 percent to 2,691.15 points.
The Euro STOXX 50's dip pushed it to only just above its 50-day and 100-day simple moving average levels which stand at around 2,650 and 2,660 points respectively. Some technical analysts said the dip could indicate the market's recent rally was running out of steam.
"The jury is still out regarding whether the advance can prove sustainable," said Tracy Knudsen, senior vice-president at technical analysis firm Lowry Research.
Toby Campbell-Gray, head of trading at Tavira Securities, saw European equity markets as trading sideways within a tight 50 or 100-point range in the near term, as expectations of new stimulus from the European Central Bank, such as a rate cut next week, would prevent any major sell-off.
"Plainly, the ECB is a help, but the market is not really trending in one way or the other," said Campbell-Gray.
SANTANDER AND UNILEVER FALL
The STOXX Europe 600 Telecoms Index rose 0.4 percent, with UK telecoms group Vodafone advancing after two people familiar with the matter told Reuters that Verizon had hired advisers over a possible $100 billion cash-and-stock bid to take full control of its Verizon Wireless venture from partner Vodafone.
However, those gains were offset by declines in other heavyweight stocks elsewhere after weak corporate results.
Spanish bank Santander was the worst-performing FTSEurofirst 300 stock, falling 3.2 percent after reporting first-quarter results below forecasts, while consumer products group Unilever fell 1.9 percent after posting weaker-than-forecast sales growth.
Campbell-Gray said he would favour pharmaceuticals and healthcare stocks - often seen as "defensive" plays in times of economic uncertainty due to solid sales and dividend payouts - and telecoms stocks at present.
"We'd be looking to buy pharmaceuticals and healthcare stocks, and selectively buy some telecoms," he added.
- U.S.'s Kerry expresses regret to India over diplomat case |
- Mega Millions winners in Georgia, California to split $648 million |
- China confirms near miss with U.S. ship in South China Sea
- Target stores' customers hit by major credit card attack
- Washington, DC city council raises minimum wage to $11.50/hr in 2016