* FTSEurofirst 300 down 0.5 pct, Euro STOXX 50 down 0.6 pct
* Sanofi, Shell, BNP, Inbev rally after posting results
* Argentina's default weighing on Spanish stocks
By Blaise Robinson
PARIS, July 31 European shares fell in early
trade on Thursday, led by Adidas after the group
warned about business in Russia, while Argentina's default also
Shares in the German sportswear company sank 12 percent,
dragging Germany's DAX 1 percent lower, after saying it
will scale back plans to expand in Russia and overhaul its golf
business, as problems in both areas prompted it to slash its
outlook for the year.
Spanish stocks also underperformed, with Madrid's IBEX
dropping 1.5 percent, as traders cited worries over
Spanish companies' exposure to Latin America after Argentina's
The country defaulted for the second time in 12 years on
Thursday after hopes for a midnight deal with holdout creditors
Overall on Thursday, corporate results from European
blue-chips were relatively positive, with shares in Sanofi
surging 3.5 percent after the French drugmaker raised
its full-year profit forecast while Royal Dutch Shell
stock gained 3.4 percent after reporting a 33 percent increase
in quarterly earnings, beating analyst forecasts.
"Despite some decent earnings from a number of blue-chips,
the market is stuck in a range, with many negative catalysts
including Argentina's default at the forefront of investors'
minds," said Lionel Jardin, head of institutional sales at Assya
Capital, in Paris.
About 40 percent of STOXX Europe 600 companies have
reported results so far in the earnings season, of which 55
percent have met or beaten profit forecast, according to Thomson
Reuters StarMine data.
On average, quarterly profits are up 7.1 percent
year-over-year, data shows, but revenues are down 1.5 percent,
fuelling concerns over the earnings trend.
At 0812 GMT, the FTSEurofirst 300 index of top
European shares was down 0.5 percent at 1,359.23 points, after
losing 0.5 percent on Wednesday.
Around Europe, UK's FTSE 100 index was down 0.04
percent, Germany's DAX index down 1 percent, and
France's CAC 40 down 0.5 percent. The euro zone's
blue-chip Euro STOXX 50 index was down 0.6 percent.
Shares in France's BNP Paribas added 0.9 percent
after the lender, recently hit by a U.S. fine, reported robust
underlying result signalling that clients had not been scared
off by the affair.
"Results are above expectations at the operating level.
Almost half of the outperformance is derived from capital
markets," a Paris-based trader said.
"Corporate financing is doing better than expected too and
better than the second quarter of last year. This suggests that
the impact of the U.S. litigation is not that large, at least
for the time being, so the reputational risk is not yet
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Editing by Janet Lawrence)