* FTSEurofirst 300 down 0.4 pct, off lows
* Index regains poise, volatility dips from 7 month high
* ARM, KPN, BP all fall after results
* UBS bucks trend, helps banks outperform
By Alistair Smout
LONDON, Feb 4 European shares followed Asian and
U.S. markets lower on Tuesday on concerns about the global
economic outlook and on disappointing earnings reports from the
likes of oil major BP and chip designer ARM.
Stocks pared some losses, however, after
better-than-expected UK construction data, which reinforced
optimism about the UK economy and also sent the euro lower
against the pound.
The pan-European FTSEurofirst 300 was down 0.4
percent at 1,268.67 by 1122 GMT, retracing part of an early 0.8
percent slide but still down more than 5.7 percent over the last
eight trading sessions.
"After the falls at the open, that's possibly the low for at
least a short while, with some better construction data helping
(shares higher)," Simon Clark, trader at ETX Capital, said.
"No one's getting too carried away, certainly before the
U.S. comes in, given how much they can change things."
In a sign of returning calm among investors, volatility
- a gauge of "fear" in sentiment - retreated from a 7
month closing high despite ticking up at the open.
Recent concerns over emerging markets were compounded in the
previous session by an unexpected drop in U.S. factory data,
which hit European equities in late trade on Monday.
Wall Street extended falls after the European market close,
with Japan's Nikkei also down 4.2 percent on concerns
about the U.S. economy.
Europe's worst-performing shares were earnings-driven. ARM
fell 3.6 percent after royalty revenue came in below
forecasts. Although this was offset by an increase in new
licence sales to deliver broadly in-line results, analysts at
Liberum raised concerns over the trend.
"We no longer think licensing is necessarily a driver of
future royalties for ARM ... Overall, these results will
continue to stoke fears of a further slowdown in ARM's royalty
trends." Liberum said in a note.
Dutch telecom company KPN opened as much as 5.7
percent lower after reporting a lower-than-expected profit
following a revenue squeeze, while BP dipped 1.4 percent
after fourth-quarter profits were hit by refining weakness.
Out of the 18 percent of companies on the DJ STOXX Europe
600 to have reported earnings so far, 45 percent of
them have missed expectations, with the biggest negative
surprises coming from the oil & gas and telecom sectors, Thomson
Reuters data shows.
Banks outperformed on Tuesday after UBS
announced a higher-than-expected profit and dividend, sending
its shares up 5.8 percent.
Europe bourses in 2014:
Asset performance in 2014:
Today's European research round-up