* FTSEurofirst 300 down 0.2 pct, Euro STOXX 50 down 0.1 pct
* Rheinmetall sinks after slashing outlook
* Nestle rises after unveiling massive buy-back plan
By Blaise Robinson
PARIS, Aug 7 European stocks dipped in early
trade on Thursday, extending a week-long slide as tensions
between the West and Russia continued to spook investors.
At 0800 GMT, the FTSEurofirst 300 index of top
European shares was down 0.2 percent at 1,321.40 points. The
index has dropped about 3.3 percent over the past week.
Germany's DAX index underperformed again, down 0.4
percent. Data showed on Thursday the country's industrial output
rose just 0.3 percent in June, missing a forecast rise of 1.3
percent, adding to signals that Europe's largest economy may
have stalled in the second quarter.
The DAX, which hit a near-five month low on Wednesday, has
lost 10 percent since mid June, hurt by worries that the
Ukrainian crisis and sanctions against Russia could derail
Germany's economic recovery.
Russian state news agency Ria Novosti said late on Wednesday
that Russia will ban all food imports from the United States and
fruit and vegetables from the European Union, in an escalation
of the economic battle with the West set off by the crisis in
"The market trend is quite bearish at the moment, and we
would need a strong positive catalyst to reverse that. All eyes
will be on the ECB this afternoon. If the tone is clearly
dovish, then it could maybe stop the bleeding on the market,"
said Alexandre Baradez, chief market analyst at IG France.
Investors awaited the European Central Bank policy meeting
and the following press conference by ECB President Mario
Draghi, due later in the day. The ECB is set to hold fire on
rates as it waits for earlier stimulus measures to gain
traction, while keeping an eye on risks from the conflict in
Shares in Rheinmetall sank 7.8 percent as it
slashed its 2014 operating profit target after the German
government withdrew its approval for a contract with
Bucking the trend, Commerzbank gained 2.5 percent
after Germany's second biggest lender posted an increase in
second-quarter earnings due in part to a fall off in bad loans.
Nestle surged 3 percent after the world's biggest
food group unveiled an 8 billion Swiss franc ($8.8 billion)
share buyback and stood by its full-year sales forecast, after
revenue growth in emerging markets picked up in the second
So far in the earnings season, 54 percent of companies
listed on the STOXX Europe 600 have met or beaten
analysts forecasts, while on Wall Street, 74 percent of S&P 500
companies have met or beaten consensus, according to
Thomson Reuters StarMine.
Around Europe, UK's FTSE 100 index was down 0.2
percent and France's CAC 40 down 0.1 percent, while
Portugal's PSI 20 index dropped 2 percent.
Shares in Portugal's largest listed bank Millennium bcp
slumped over 10 percent and other banks also fell
sharply on investor concerns that lenders will end up paying for
the recent rescue of rival Banco Espirito Santo by the state.
"The concerns continue about banks having to foot the bill
for saving BES, which is their rival, and institutional
investors are apparently selling off shares of Portuguese banks
as a whole after the BES debacle," said Jose Novo, a trader at
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(additional reporting by Andrei Khalip in Lisbon; Editing by