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European shares weaker as Ericsson slump sours mood

European shares fell on Tuesday on the back of a disappointing set of results from blue chips including Ericsson and Lufthansa, while scaled-back expectations of rate hikes at central banks spurred some profit-taking in financials.

The pan-European STOXX 600 was down 0.3 percent. The basic resources sector fell more than 1 percent while banks were down 0.5 percent.

Ericsson dropped 8.5 percent after cutting its forecast for the mobile infrastructure market and reporting a wider than expected loss, a further blow to the company undergoing a cost-cutting effort.

Zalando weighed on the retail index after it reported slowing sales growth, with the German online retailer’s co-CEO saying capacity constraints limited growth as new warehouses came on stream.

German airline Lufthansa fell 3.8 percent, the worst DAX performer, despite upping its profit forecast after a bumper summer of bookings.

UK peers International Consolidated Air and EasyJet were among top FTSE 100 losers.

Norwegian fertilizer company Yara fell 5.7 percent after its quarterly earnings were dented by a squeeze in margins.

Among boosts to the index were British spread-betting firm IG Group, leading gainers after reporting an increase in annual profit, beating analysts’ estimates.

Struggling UK mid-cap Carillion rose more than 8 percent after more contract wins. The stock is now up for than 50 percent from last week lows.

Britain’s second largest listed property developer British Land jumped 2.7 percent after announcing a 300 million pound share buyback and among the top performers on the STOXX 600. (Reuters)

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