* Pan-European benchmark index down 0.2 pct
* Deutsche Bank leads banks lower after sales drop
* Well-received earnings help SKF, Nokia, Subsea 7
* Zodiac drops on doubts over Safran takeover
(Adds closing prices, details)
By Danilo Masoni and Helen Reid
MILAN, April 27 European shares fell from
20-month highs on Thursday as weaker banks weighed, with the
broader market little moved by a widely expected European
Central Bank decision to stand pat on policy.
The pan-European STOXX 600 index fell 0.2 percent,
after hitting a 20-month high in the previous session. France's
CAC fell 0.3 percent, off Wednesday's nine-year high.
The ECB kept its ultra-easy policy stance in place as
inflation continues to undershoot its target but explicitly
acknowledged the vigour of the euro zone economy, now on its
best run since the global financial crisis.
The news conference by Mario Draghi saw equity indexes
see-sawing but remarks from the central bank governor failed to
provide a clear direction for markets.
"This was a pretty confusing and conflicting performance
from Mr Draghi. He's had to acknowledge that the growth outlook
has improved and the risks to the outlook are more balanced
without following that through into the inflation outlook," said
Aberdeen Asset Management investment manager James Athey.
"At this stage, it's better to just look beyond today.
There's enough from today to suggest that we might see a
material change in policy in June," he added in a note.
Besides the ECB, earnings were a key focus for equity
traders in Europe. First-quarter earnings for STOXX 600
companies are expected to rise 5.5 percent and revenues are seen
up 5.7 percent, according to Thomson Reuters I/B/E/S data.
Deutsche Bank shares fell 3.7 percent as a fall
in first-quarter revenues disappointed, even though net profit
more than doubled due to a rebound in bond trading.
"We are positive on costs and capital but the key
uncertainty remains revenues," said UBS analysts.
Deutsche Bank's share price has nearly doubled from its
September 2016 lows.
A 6 percent drop in Spain's Banco Popular added to
underperformance in euro zone banks, down 1.8 percent.
Intesa Sanpaolo also weighed, down 2.3
percent, after Generali said it saw a short term
opportunity to sell its stake in the Italian lender.
However, results from Lloyds boosted the British
bank by 2.3 percent after its first-quarter profit bucked
expectations of a post-Brexit dip.
First-quarter earnings hit by weak margins in its renewable
and retail business dampened appetite for shares in Finnish
energy company Neste which fell 4.2 percent, dragging
on the broader European energy index.
Shares in debt-laden aeronautical firm Zodiac Aerospace
fell 6.5 percent after a French media report raised
doubts on a planned takeover by Safran.
"Zodiac being acquired by Safran would actually be the best
thing to happen for Zodiac shareholders," said Alphavalue
analysts in a note, adding that its "dangerously" high level of
debt would require a capital increase of 0.7 billion euros.
Among risers, Mediclinic jumped 17.5 percent after
Abu Dhabi cancelled a requirement for citizens to make a 20
percent co-payment for treatment at private facilities, in a
boon to private healthcare providers.
Elsewhere, upbeat results from the likes of SKF ,
Nokia and Subsea 7 were cheered as more
investors piled into the European economic recovery story.
Of the 20 percent of STOXX companies having reported so far,
70 percent had beaten estimates while 19 percent had missed,
Thomson Reuters data showed.
(Reporting by Danilo Masoni; Editing by Mark Trevelyan)