Europe shares close down after disappointing earnings

European shares closed lower on Thursday, with investor confidence curbed by a mixed bag of earnings from major companies and concerns about slowing growth in China.

The FTSEurofirst 300 Index provisionally closed down 0.5 percent at 1,208.57 points, despite upbeat data from the U.K. and Germany.

In Germany, business morale improved in July for the third month in a row, figures from the Ifo institute released on Thursday showed. The Business Climate Index rose to 106.2 in July, above expectations of 106.1. In June, the figure was 105.9.

(Read More: German business sentiment improves in July)

In addition, the U.K. economy expanded by 0.6 percent in the second quarter of the year, according to preliminary estimates, meeting analyst expectations.

(Read More: UK GDP doubles rate of growth, meeting expectations)

However, the data failed to offset losses after several companies released disappointing second quarter numbers. The FTSE 100 closed down roughly 0.5 percent while the German DAX closed around 1 percent lower.

The picture was similar in the U.S., where the Dow Jones Industrial Average and S&P 500 extended their losses on Thursday, as investors digested the latest round of corporate earnings and a report showed that jobless claims ticked higher last week.

(Read More: Unequal US recovery not helping us: Unilever CEO)

Back in Europe, European shares were weighed down warnings from Siemens and BASF.

Chemicals company BASF issued a cautious outlook for the year due to China weakness and shrinking European markets. BASF shares closed roughly 4.6 percent.

German engineering firm Siemens announced it was scrapping its 2014 profit target citing lower market expectations. The company said that its current cost-cutting efforts are largely on track. Shares closed by around 6.2 percent on the news.

Elsewhere, Anglo-Dutch firm Unilever reported underlying sales growth of 5 percent for the second quarter, just shy of market expectations. Shares closed down roughly 1.5 percent.

Meanwhile, Swiss bank Credit Suisse said that net profit for the second quarter rose nearly 33 percent on the year, on a rise in both stock and bond trading at its investment bank. The results beat expectations, but shares closed down around by 3.2 percent, with analysts citing the shares' rally over recent months as one reason for this.

(Read More: Credit Suisse CEO: We can handle higher interest rates)

Among the gainers, Swiss pharmaceutical firm Roche reported strong sales of its top three drugs, helping it to a bigger-than-expected 10 percent rise in first-half core earnings. Shares of the firm closed by roughly 0.6 percent.

(Read More: Roche declines to stamp out Alexion deal rumors)


In Asia, stocks declined on Thursday on worries over earnings and renewed fears of strained liquidity in China. But Wednesday's positive manufacturing data in the U.S. and Europe helped cap losses.

On Wednesday, the HSBC preliminary Chinese manufacturing Purchasing Managers' Index (PMI) dropped to an 11-month low.

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