Nordic shares lead Europe lower as DNB, Skanska disappoint

Thu Jul 10, 2014 3:56am EDT

* FTSEurofirst 300 down 0.1 pct, Euro STOXX 50 down 0.3 pct

* DNB, Skanska lead losers after updates

* Burberry rallies as it posts organic sales growth

By Francesco Canepa

LONDON, July 10 (Reuters) - European shares eased on Thursday, led down by Nordic stocks after disappointing updates from Norwegian bank DNB and Swedish construction firm Skanska.

Norway's largest bank posted lower-than-expected second-quarter results, partly due to higher loan losses, while Skanska said it would significantly scale down its loss-making Latin American operations after taking a charge in the second quarter.

Their shares, each down about 3 percent, were the top fallers on the pan-European FTSEurofirst 300 index, which was down 0.1 percent at 1,362.54 points by 0743 GMT.

The index, which hit a 6-1/2 year highs last month, was down for the fourth out of the past five sessions as a handful of disappointing earnings updates cast a shadow on the upcoming reporting season and raised questions about a nearly 10-percent rally between mid-March and last week.

"We were looking at an overextended market, so a degree of profit taking was inevitable," IG chief market strategist Brenda Kelly said.

The euro zone blue chip Euro STOXX 50 was down 0.3 percent while Olso's OSEBX shed 1 percent and Britain's FTSE 100 was up 0.1 percent, helped by a rise in luxury group Burberry.

Burberry shares were up 2.3 percent, to be the leading FTSEurofirst 300 gainers, posted a 12 percent rise in like-for-like retail sales for its fiscal first quarter to June 30.

It warned, however, that if exchange rates remained at today's levels, that would have a "material impact on profits".

"Despite driving best-in-class top-line growth, the continued margin pressure at Burberry remains a concern, and today's results do not help to improve the profitability gap that exists between Burberry and its luxury peers," Bernstein analysts wrote in a note.

"Given the recent underperformance of the stock, we expect today's results to be positively received by the market."

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)

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