European shares suffer biggest daily drop in month
Published 30/01/2013 | 08:52
EUROPEAN shares suffered their biggest daily drop this month after gloomy earnings and weak U.S. economic data hit sentiment on Wednesday and left some positioning for further falls in the near-term.
A profit warning from Saipem caused shares in Europe's biggest oil services company to fall 34.3pc and sent shockwaves through the oil & gas sector.
Imperial Tobacco, meanwhile, shed 3.9pc after guiding for lower profits.
They both weighed on the pan-European FTSEurofirst 300 index, which provisionally closed 0.6pc lower at 1,170.78 points -- retreating from 2-year highs hit the day before and chalking up the worst daily loss since Dec. 28.
It does, however, remain on course to record its best month since July last year.
The index extended losses in the afternoon as data showed the U.S. economy unexpectedly contracted in the fourth quarter, suffering its first decline since the recession ended more than three years ago.
"Surely this is a little bit of a wake-up call to this never-ending market rally," Dermot Corrigan, head of derivatives trading firm Qubed Derivatives, said. "The (cash) market is well overbought, so a correction would be healthy."