* FTSEurofirst 300 down 0.6 percent
* Roche, TeliaSonera, Diageo drop on earnings news
* Weak Chinese data weighs on sentiment
By Tricia Wright
LONDON, Jan 30 European shares fell on Thursday,
losing ground for the fifth time in six sessions, pressured by
weaker earnings and with emerging markets concerns continuing to
take their toll on market sentiment.
Roche was a big drag on the FTSEurofirst 300, down
1.2 percent after the Swiss drugmaker posted lower-than-expected
profits and raised its dividend less than expected.
And Nordic telecom operator TeliaSonera fell 3.9
percent, as it said it expected flat sales and margins in 2014
after reporting fourth-quarter profit below expectations.
Investors have been on edge in recent days as unease about
slowing Chinese growth and the withdrawal of U.S. monetary
stimulus spread from emerging market currencies to the world's
big stock markets.
European stocks have come under intense selling pressure,
with the FTSEurofirst 300 index of top European shares
losing nearly 5 percent in six sessions, as investors have
dumped risky assets such as equities. The FTSEurofirst 300 was
down 0.6 percent at 1,282.70 points by 0914 GMT.
Pointing to a weak start for China's economy in 2014, the
Markit/HSBC final manufacturing PMI for January dipped to 49.5
from December's 50.5. A reading below 50 indicates a contraction
while one above shows expansion. The figure was in line with the
49.6 reported in the preliminary version of the PMI released a
Late on Wednesday, the Fed said it would trim its bond
purchases by another $10 billion, as it stuck to a plan to scale
back its stimulus despite recent turmoil in emerging markets.
"Of course at the end it's very good news that things are
going back to normal," said Marc Renaud, chairman of Paris-based
Mandarine Gestion, referring to the Fed tapering.
"But in terms of short-term risk, and we can see it in
companies' figures for the third and fourth quarters, this
emerging markets risk is huge."
Spirits maker Diageo was a big faller on Thursday,
off 5.8 percent and knocking most points off the FTSEurofirst
300, after saying its net sales growth slowed in the latest
period, hurt by weakness in China, Thailand and Nigeria.
Alongside the emerging market worries, investor concern has
focused on the current earnings season, and whether it will
result in profits strong enough to justify lofty valuations
after a bumper 2013.
The STOXX Europe 600 is trading on a 12-month forward
price/earnings ratio of 14 times against its 10-year average of
11.9 times, Thomson Reuters Datastream shows.
"Clearly what's going on in emerging markets is... subduing
risk appetite a little bit in the short term and... it's
coinciding with the bottom-up earnings news which is pretty
mixed," Peel Hunt equity strategist Ian Williams said.
"I just don't know how you can justify further multiple
expansion at the moment. The reasons for that multiple had a lot
to do with central bank stimulus which has not been withdrawn
yet but is certainly not continuing at the pace it was."
According to StarMine SmartEstimates, which focus on the
up-to-date predictions of the historically most accurate
analysts, STOXX Europe 600 companies are on average seen missing
consensus quarterly profit forecasts by 2.7 percent.
Europe bourses in 2014:
Asset performance in 2014:
Today's European research round-up: