LONDON Feb 20 European shares fell on Wednesday
as surprise dividend cuts by RSA and Lufthansa and weak results
from the likes of Accor and BHP Billiton weighed on sentiment.
The FTSEurofirst provisionally closed down 3.65
points, or 0.3 percent, at 1,168.08.
Britain's biggest business insurer RSA was the
biggest individual faller after it unexpectedly cut its dividend
by a fifth after weak investment returns, sending its shares
down 14.9 percent.
"There would have been a lot of income funds invested in the
stock purely on the basis of its dividend, so they would have
been selling out of it today, but once it settles down investors
will realise that it was a sensible move," Paul Mumford, a fund
manager at Cavendish, said.
The announcement had a knock on effect within the insurance
sector with Aviva down 4.4 percent as Markit downgraded
its dividend forecasts for the company by up to 19 percent.
While Europe's biggest airline Lufthansa shed 6
percent after stunning markets by witholding a dividend for the
second time in three years.
Telecoms, which have the highest dividend
expectations in Europe -- analysts forecast a 6.1 percent yield
in the sector over the coming 12-months -- fell 1.3 percent.