French blue-chips lead European shares lower after euro zone PMIs

Wed Apr 23, 2014 4:14am EDT

* FTSEurofirst 300 down 0.2 percent

* French, German PMIs point to diverging economies

* Ericsson falls after earnings miss

* Primark gives Associated British Foods a lift

By Alistair Smout

LONDON, April 23 (Reuters) - French blue-chip shares underperformed their German counterparts on Wednesday after survey data showed that the recovery in France is still weaker than the euro zone's biggest economy.

France's CAC 40 index fell 0.3 percent, underperforming a 0.2 percent drop on the pan-European FTSEurofirst 300, after purchasing managers index (PMI) data for the country showed waning momentum in its fragile economic recovery.

France's manufacturing and services figures came in slightly below expectations, albeit still in expansion territory.

By contrast, survey data from Germany came in ahead of expectations, posting its 12th straight month of expansion. ID:nL9N0MI018]

Germany's DAX eased just 0.1 percent.

"The gap between France and Germany is clearly widening," IG analyst David Madden said.

"France has seen some relatively strong figures in the last couple of months, which have started to turn opinion slightly. But today's soft figures, coming in below expectations ... just shows you how fragile the French economy really is."

Euro zone composite PMI data came in slightly ahead of expectations, starting the second quarter on its strongest footing for nearly three years.

By 0801 GMT the pan-European FTSEurofirst 300 was down 0.2 percent at 1,344.52, after surging 1.3 percent on Tuesday.

Earnings news was mixed, continuing a theme of the season so far where 53 percent of STOXX Europe 600 companies that have reported results have beaten or met expectations.

Swedish mobile telecom equipment maker Ericsson fell 4.9 percent, a top FTSEurofirst 300 loser, after missing first-quarter sales and profit forecasts, hit by weak trading in North America.

"Numbers look a little light given the sales miss, but with margins improving and costs seemingly under control, I'm surprised the stock is down the thick end of 6 percent," Matt Basi, senior sales trader at CMC Markets said, noting that guidance for second quarter sales was bullish.

The top riser was Associated British Foods, which surged 9.1 percent after it met forecasts, gave a bullish outlook for full-year profits and got a boost from its Primark clothing business.

Europe bourses in 2014: link.reuters.com/pap87v

Asset performance in 2014: link.reuters.com/gap87v

Today's European research round-up (Editing by Louise Ireland)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.