* FTSEurofirst 300 falls 0.7 percent
* Tod's weighs on luxury sector after earnings
* Possibility of pick-up in China defaults could slow growth
By Alistair Smout
LONDON, March 12 European shares fell on
Wednesday, weighed down by below-forecast earnings reports and
fears of more corporate defaults in China as a persistent
decline in the copper price hit the mining sector.
The STOXX Europe 600 personal and household goods sector
fell 1.5 percent, to be the top sectoral decliner, led
lower by a 4.2 percent drop in Tod's after the Italian
luxury shoemaker posted a drop in 2013 profit and said it was
cautious about prospects for 2014.
Fellow luxury goods firm Swatch fell 1.2 percent
and, in the same sector, tobacco firm British American Tobacco
, was one of several UK-listed stocks to trade without
entitlement to its latest dividend payout, hitting its shares.
The basic resources sector was also a heavy faller,
down 1.2 percent after Shanghai copper fell by its five percent
London copper hit a 44-month low on growing concerns over
credit-linked defaults in China, the world's top consumer of the
metal where copper is often put up as collateral for lending.
"There will be more corporate defaults in China, but
provided they can be ringfenced in the smaller banking and
finance area, the it won't have a lasting systemic impact on
global and financial markets," Jeremy Batstone-Carr, analyst at
Charles Stanley, said.
"Markets are on red-alert for the possibility that we'll see
more and bigger defaults as time passes. The bigger concern is
that wound up in these defaults is the threat of a Chinese
slowdown over and above that which is pencilled in," he said.
The pan-European FTSEurofirst 300 fell 0.7 percent
to 1,312.36 points, taking falls in the last 9 days to 2.7
Stock markets have been under pressure since a deterioration
in the situation in Ukraine at the beginning of last week, when
Crimea effectively fell under Russian control, prompting the
worst East-West crisis since the Cold War.
While traders cited the preparation of sanctions by the EU
and United States against Russia as risking retaliation that
could hurt economies in the region, the crisis was seen as
having less of an impact than it had done in recent sessions.
"Event risk for Ukraine is now almost fully priced in," Alex
Chehade, Senior Dealer at TradeNext, said in a note.
"There will be no solution in the near term but it seems
the idea of armed conflict is currently shelved."
Europe bourses in 2014:
Asset performance in 2014:
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