* FTSEurofirst 300 drops 0.3 percent
* Infineon and Vodafone both knocked by weak sales
* Norsk Hydro tumbles after placement
By Alistair Smout
LONDON, Nov 12 European shares edged lower on
Tuesday, drifting away from near five-year highs, after a spate
of disappointing company updates confirmed the trend of weak
demand and poor revenues in the quarterly earnings season.
German chip maker Infineon fell 5 percent after
flagging a revenue drop at all of its units for the current
fiscal quarter, even though earnings came in above estimates.
Vodafone, the world's second-biggest mobile
operator, dropped 0.6 percent after reporting a 4.9 percent drop
in quarterly organic service revenue, hit by very weak trading
Building materials company CRH managed a 4 percent
gain, the top riser on the FTSEurofirst 300, after revenues
rose, although the increase was based on demand from the United
States as trading in Europe remained weak.
While half of the 80 percent of Stoxx Europe 600
companies that have reported so far have missed profit
forecasts, nearly two-thirds have missed revenue forecasts,
according to data from Thomson Reuters StarMine.
"Earnings in general have been OK, but it's not a blowout,
and the revenues have been disappointing," said Mike Harris,
partner at TJM Partners.
"I would be a seller of European equities in this zone, or
at least not a buyer."
The pan-European FTSEurofirst was down 0.3 percent at
1,294.38 at 0840 GMT, 1.4 percent down from five-year highs hit
last Thursday, but still up 16.5 percent since June.
The index has traded in a sideways range since giving away
gains made on the back of an European Central Bank Rate cut last
week, with public holidays in France and the United States on
Monday hitting volumes.
"Some are getting nervous about the lack of volume so, if
you've got any decent performance, you're probably not going to
get much more upside from here," said Ioan Smith, managing
director of KCG Europe.
"The risk/reward will be skewed to shutting up shop and
booking those gains."
The top individual faller was Norwegian aluminium producer
Norsk Hydro, down 5.7 percent after Brazilian miner
Vale sold most of its stake in the group.