European Shares Close Lower on Growth Concerns
European shares closed lower on Wednesday for a third consecutive session, with resurging worries about the global economic outlook undermining investor sentiment.
The pan-European FTSEurofirst 300 Index provisionally closed 0.4 percent lower at 1,091.57 points.
On Wednesday, the International Monetary Fund released a report which singled out the euro zone debt crisis as a key threat to global growth. The IMF said inaction in the area exposed the region to “capital flight, breakup fears and economic decline.”
Also on Wednesday, Greece is continuing talks with officials from the Troika (the IMF, the European Central Bank and the European Commission) over the budget cuts needed to receive the next tranche of a 130 billion euro ($167 billion) aid package.
Elsewhere in the euro zone, French President Francois Hollande will meet Spanish Prime Minister Mariano Rajoy in Paris for a Franco-Spanish summit on Wednesday.
BAE and EADS End Merger Talks
The spotlight fell on British defense firm BAE Systems and Franco-German aerospace company EADS . The two companies announced that they will not extend their merger talks, calling an end — for now — to a plan to create the world's largest defense and aerospace group.
Shares in Bang and Olufsen closed sharply lower after the Danish stereo and television maker released first quarter earnings showing a decline in its core audio-visual business.
It added to investor concerns after U.S. bellwether aluminum maker Alcoa cut its demand forecasts and oil major Chevron Corp issued a profit warning.
"I think the earnings season is going to be very disappointing," Robert Quinn, chief European strategist at Standard & Poor's Capital IQ, said.
"There may even be the case for a reversal [of the recent equity rally], with the macro side still negative while the impulse from policy won't be contributing very much."