* FTSEurofirst 300 down 0.1 percent, well off session low
* Volatility dips from 7-month high
* ARM, KPN fall after results
* UBS helps banks outperform
By Tricia Wright
LONDON, Feb 4 European shares inched lower on
Tuesday, extending recent steep falls, pegged back by
disappointing earnings reports from the likes of chip designer
ARM and telecom company KPN.
ARM fell 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 KPN fell 4.5 percent after reporting
lower-than-expected profit on the back of a revenue squeeze.
Out of the 18 percent of companies on the DJ STOXX Europe
600 to have reported earnings so far, 45 percent have
missed expectations, with telecoms among the sectors posting the
biggest negative surprises, Thomson Reuters data shows.
Banks bucked the trend after UBS announced
a higher-than-expected profit and dividend, sending its shares
up 5.6 percent.
The pan-European FTSEurofirst 300 was down 0.1
percent at 1,272.30 points by 1603 GMT, well off a session low
of 1,263.36, though still down almost 6 percent from a late
Investors have been unnerved by the pace of Chinese growth
and the withdrawal of U.S. monetary stimulus, concerns that have
spread from emerging markets to the world's big stock markets.
But, in a sign of some returning calm among investors,
volatility - a gauge of "fear" in sentiment - retreated
from a 7-month closing high despite ticking up at the opening.
Analysts highlighted that the emerging markets slump is
driving flows of money into western Europe, where some of the
region's main economies are slowly recovering from the effects
of the euro zone's prolonged sovereign debt crisis.
"This emerging market crisis is a good reminder that boring
old Europe is actually a pretty good place to be invested in,"
fund manager Ollie Beckett at Henderson Global Investors, which
has 70.8 billion pounds ($115.6 billion) in assets under
Investment inflows from U.S. investors into European
equities remained brisk in the seven-day period ending on Jan.
29, Thomson Reuters Lipper data showed, in sharp contrast with
massive outflows rocking emerging market funds.
"I don't think investors should worry at this stage. We're
far from risk aversion where people (would be) saying I just
want to hold cash," said Andrew Milligan, head of global
strategy at Standard Life Investments, which has 179.6 billion
pounds of assets under management.
Europe bourses in 2014:
Asset performance in 2014:
Today's European research round-up