* FTSEurofirst 300 down 0.3 pct
* STOXX Europe 600 Basic Resources index down 2.3 pct
* UK's FTSE 100 among the worst hit national indexes
* Healthcare and telecom outlooks knock defensive sectors
By Simon Jessop and Alistair Smout
LONDON, Feb 25 A seven-session winning streak in
the leading pan-European share index was likely to be snapped on
Tuesday after the mining sector absorbed a fresh knock from
China and weak corporate outlooks dented the earnings picture.
After weathering a torrid 2013 on concerns about slowing
growth in the world's top metals consumer, the STOXX Europe 600
Basic Resources index started the year brightly, adding
8 percent in a run to the February high, only to cede half those
gains over the last four days.
That trend got a sharp shove and left the sector on course
for its worst day's trade in three weeks on Tuesday, extending
the previous session's fall, after yuan weakness compounded
recent efforts by Beijing to curb bank lending.
"The mining sector slide is all down to China's policy of
actually devaluing the Reminbi and it has much further to run,"
said Justin Haque, director at Hobart Capital Markets.
By 1516 GMT, the sector was down 2.3 percent, led by
UK-listed Rio Tinto, Anglo American and BHP
Billiton, all down between 2.2 and 3.8 percent to ensure
the UK's FTSE 100 was Europe's index laggard.
The broader FTSEurofirst 300, meanwhile, was down
0.3 percent at 1,347.02 points, after seven days of gains that
had left it less than half a percent from its 2013 high.
While some investors have been lured back to the materials
sector by a belief that much of the bad news is in the price,
the current earnings season has provided little evidence so far.
Data from StarMine shows that half the companies in the
sector that are due to report have done so, but nearly
two-thirds have missed earnings estimates, with an average
negative surprise of 47 percent.
Revenues were still weak but showed some improvement
relative to sector peers, with 56 percent missing estimates by
an average surprise of minus 2.1 percent.
That general malaise was felt elsewhere in the region on
Tuesday with Fresenius Medical Care (FMC) among the
top fallers, down 5 percent after it unexpectedly forecast
another decline in profit for 2014, while weak outlooks also hit
French telecom firm Vivendi, British industrial GKN
and oil drilling firm Seadrill.
"The sectors today that have reported negative results have
come from the telcos, which we're a bit cautious on anyway, and
healthcare. It's more defensive sectors where we've seen these
weaker results," James Butterfill, global equity strategist at
Europe bourses in 2014:
Asset performance in 2014:
Today's European research round-up