MILAN (Reuters) - Weak trading updates in Britain and dealmaking activity drove some big share price moves in Europe on Wednesday as the broader market weakened after a strong start to the year.
Their losses, along with weakness in the heavyweight financial and healthcare sectors, dragged the pan-European STOXX 600 .STOXX index to close 0.1 percent lower. Britain's FTSE .FTSE fell by 0.4 percent.
Contractor Interserve IRV.L tumbled around 15 percent early in the session after the Financial Times reported that British ministers are "very worried" and have set up a team of officials to monitor the company following the collapse of competitor Carillion.
Interserve later pared its decline to just 0.4 percent after the company said it anticipated its 2017 financial year performance to be in line with expectations and saw 2018 operating profit ahead of market consensus forecasts.
Cyclical autos, commodity-related stocks and banks have led gains in European equities since the turn of the year, helped by bond market jitters and optimism that the region is relatively early in a cycle of profit upgrades and capital spending growth.
Despite Wednesday’s decline, the STOXX remains close to a 2-1/2 year high hit early this month.
A strengthening of the euro - the currency recently touched a three-year high against the dollar - has caused some nerves over European companies most reliant on dollar earnings.
“Could this derail European profits? We think not, the level of the currency is not problematic and part of the driver has been an improvement in European macro. But worth watching,” UBS said in a strategy note. “We would focus on domestic exposure and cyclicality (Banks).”
The Dutch chipmaking equipment supplier posted better-than-expected net profit in the fourth quarter as customers asked for early delivery of products as semiconductor demand booms.
(Graphic for European Stocks vs Euro, click reut.rs/2DHdkCU)
Reporting by Danilo Masoni; editing by Mark Heinrich
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