* FTSEurofirst 300 falls 0.2 pct
* RBS drops 7.5 percent after earnings report
* Renault dips after partner Nissan cuts outlook
By Alistair Smout
LONDON, Nov 1 European stock markets eased off
five year highs on Friday, after fresh signs of corporate
earnings weakness pegged back Royal Bank of Scotland and
RBS was the top FTSEurofirst 300 faller after
posting a surprise loss, missing profit forecasts by 1 billion
pounds ($1.6 billion).
The bank traded down 7.5 percent despite a plan to create an
internal "bad bank" that was in line with market expectations.
Renault also dropped on earnings concerns, falling 4.3
percent after its Japanese partner Nissan cut its
profit outlook, while UK aircraft parts supplier Meggitt
lost over a tenth of its stock market value after
cutting its own revenue guidance.
According to Thomson Reuters StarMine data, 53 percent of
companies on the pan-European STOXX 600 index have
missed market expectations with their results.
"Investors have taken the recent profit target revisions and
earnings misses from the likes of RBS... as an opportunity to
take some profits out of the recent rally," Kash Kamal, research
analyst at Sucden Financial, said.
The pan-European FTSEurofirst 300 index was down
0.2 percent at 1,290.11 points at 1549 GMT, slipping back from a
5-year high closing high of 1,292.73 set in the previous
Kevin Lilley, head of European equities at Old Mutual Global
Investors, said he was not too concerned by the weak third
quarter results. He felt 2014 would better for companies as the
European economy gradually recovered from the effects of the
region's sovereign debt crisis.
"Companies are missing on the revenue side but they're not
doing too badly on the profit side," said Lilley.
"For me, it's still very comfortable. We're beginning to
emerge out of recession in Europe and people will have greater
confidence in 2014."
Stocks extended losses in afternoon trade, after strong U.S.
data reiterated the case for a slowing of U.S. monetary stimulus
sooner than had been expected.
"The stronger than expected ISM manufacturing index released
earlier today fuelling speculation that the bond buying
programme will be reined in sooner rather than later," Kamal
"With investors cautious to any change in Fed policy we
could see short term moves back towards 1250."