European Shares Close Down as Earnings Disappoint
Mixed corporate earnings capped gains on Europe's top share index on Wednesday, with investors also cautious as Wall Street re-opened after two days of closure due to Hurricane Sandy.
The FTSEurofirst 300 Index closed provisionally down 0.5 percent at 1097.54 points.
The FTSEurofirst has remained in a 40-point range since early September, having rallied 16.4 percent from June lows.
"The market has disassociated itself from risk. It looks like lower rates and the persistent pledge by the European Central Bank to make sure nothing really bad happens to Spain keeps bolstering the market," Gerry Celaya, chief strategist at Red Tower Research, said.
Among major blue-chip firms posting results, European airlines Air France-KLM and Lufthansa each closed sharply higher after posting results and outlooks which reassured investors. Both firm announced cost-cutting measures in order to maintain margins against a depressed macro economic outlook.
However, there was disappointment for UK bank Barclays, already rocked by an interest rate-rigging scandal. It closed lower after it unveiled two new U.S. regulatory investigations into its financial probity, and said third-quarter profits fell by a fifth due to charges for the mis-selling of insurance.
Fifty-six percent of European companies have so far met or beaten albeit drastically lower expectations in the current quarter. Firms on the whole have reported 19 percent growth in earnings in the third-quarter year-on-year, but that has still missed expectations by about 0.4 percent, according to Thomson Reuters Starmine.
After a conference call on Wednesday, euro zone finance ministers said they expected a deal on restarting emergency lending to Greece in place by November 12, if Athens agrees to necessary reforms and takes action on them, first.
In Portugal, the government passed its austerity budget on Wednesday. However, it is "almost certain" to be challenged in the constitutional court, according to political experts quoted by Reuters.