* FTSEurofirst 300 down 1.0 percent
* Iberian austerity strikes disrupt transport
* Ryanair descends on disruptions, ex-div
* Vivendi and Telekom Austria gain after results
By David Brett
LONDON, Nov 14 European shares fell on
Wednesday, led by Ryanair, as unrest in Europe over austerity
measures overshadowed some upbeat company results.
The FTSEurofirst 300 closed down 10.73 points, or
1.0 percent, at 1,088.43, paring gains made on Tuesday after
speculation Spain might be closer to asking for a bailout.
Olli Rehn, the EU's top economic official, said measures
Spain announced for 2014 on deficit reductions fall short of
what is required, although it has taken effective action to
address its budget deficits in 2012 and 2013.
"There are still some big macro headwinds out there," said
David Hambidge, who leads the multi-asset team at Premier Asset
Management, which has around 3 billion pounds ($4.75 billion) of
assets under management.
"We wouldn't chase the market higher from this level but
should equities have a reasonable correction then we would be
looking to add to our position," he said.
Strikes in Spain and Portugal on Wednesday in protest
against spending cuts and tax hikes shut transport links across
the Iberian peninsula.
This put further pressure on Irish budget airline Ryanair
, which was trading without dividend rights. The stock
led fallers, down 5.9 percent in volume nearly five times its
90-day daily average
Middle East tensions and the question of whether the U.S.
government can avoid a "fiscal cliff" of some $600 billion in
automatic tax hikes and spending cuts added to the broader
Illustrating investors' aversion to risk, basic resource
stocks, whose appeal rests on global economic strength,
fell 2.1 percent.
Investors anxious to preserve capital accepted negative
yields on two-year German government debt, while longer-term
Spanish bond yields edged back toward the 6 percent level.
Traders remain convinced that bond market investors will
eventually force Spain's hand in asking for help by pushing the
yield on their debt beyond sustainable long-term levels.
Partly reflecting the economic damage from the euro debt
crisis, telecoms firm Vodafone and utility E.ON
have cut their outlooks and 43 percent of companies
in Europe missed earnings expectations in the current quarter.
That has triggered an average downgrade to fourth-quarter
estimates of 2.8 percent over the last 30 days. The debt crisis
has weighed on companies in the U.S. too, where 61.7 percent
have reported revenue below analyst expectations, compared with
an average beat of 62 percent over the last 10 years.
Investors, however, welcomed forecast-beating results at
Vivendi and Telekom Austria, which boosted
their share prices, but broader macro worries dragged the euro
zone blue chip index down 0.8 percent to 2,472.
"The market (E-STOXX 50) is mostly moving between 2,475 and
2525, where all the pins (the weight of where option market is
positioned) are for options expiry at the end of the week. I
don't expect it to fall much further," a London-based portfolio
trader at a U.S. investment bank said.