European shares retreat on earnings season caution
EUROPEAN shares retreated from six-week highs on Tuesday, as concern about the earnings outlook gave some a cause to book profits, with Swedbank hit after its results lagged forecasts.
The Swedish bank fell 3.9pc after it posted a fall in second-quarter earnings and said margins could be weaker in the coming months as a result of increased competition in the country's mortgage market.
The FTSEurofirst 300 index provisionally ended 0.6pc lower at 1,192.40 points. The index, which climbed up to 1,203.93 in the previous session to set its highest since early June, is up more than 8pc from a June low.
"Recent price gains have prompted some investors to book profits. People are also cautious because of concerns that the second-quarter earnings season might disappoint," Christian Stocker, equity strategist at UniCredit in Munich, said.
"I see European equities flat to down in the coming weeks. The DAX could fall to 7,600 points by mid-August," Stocker said, referring to Germany's benchmark index, which fell 0.4 percent to 8,201.90 following poor sentiment data.
The Mannheim-based ZEW economic think tank's monthly poll of economic sentiment unexpectedly fell to 36.3 from 38.5 in June, against expectations of a rise to 39.6.