BT warning, poor earnings weigh on European shares; Generali rallies

  • Reuters
  • Stock Market News
BT warning, poor earnings weigh on European shares; Generali rallies
Credit: © Reuters.

* STOXX 600 ends up 0.2 pct

* BT dives after profit warning

* Aryzta, easyJet also drop after results

* Generali jumps on takeover speculation (Adds details, closing prices)

By Kit Rees

LONDON, Jan 24 (Reuters) - Europe's earnings season got off to a rocky start on Tuesday with profit warnings from BT Group BT.L and Aryzta ARYN.S sending their shares sharply lower.

The pan-European STOXX 600 index .STOXX still managed to eke out a 0.2 percent gain, though, propped up by Italian financials and mining stocks.

While basic resources .SXPP was the biggest sectoral riser, boosted by a weaker dollar, Italian insurer Generali GASI.MI was the biggest individual gainer, jumping 8.2 percent on talk Intesa Sanpaolo ISP.MI could make a bid for it.

Sources close to the matter said Intesa was considering a bid for Generali and that its two main foundation shareholders backed the move even if it could temporarily reduce dividends for the bank's current investors. index .FTMIB was the standout performer, up 0.9 percent as Generali's biggest shareholder Mediobanca MDBI.MI also rallied 5.6 percent. Intesa's chairman, Gian Maria Gros-Pietro, said the bank would not discuss Generali at a board meeting due on Friday but would focus on budget issues. shares fell 4.4 percent.

BT BT.L lost a fifth of its market value, hit by an Italian accounting scandal that has compounded a sudden slowdown in its British government work and forced the telecoms group to cut forecasts for the next two years. Shares in the company tumbled by 20.8 percent to 303 pence, their biggest ever one-day fall. think companies have been punished ... over the last year for misleading statements, for false accounting," Jonathan Roy, advisory investment manager at Charles Hanover Investments, said. "The worries are, is there anything else that isn't being managed as it should be?"

Swiss bakery firm Aryzta ARYN.S was the biggest faller, sliding 31.9 percent after issuing a profit warning.

Budget airline easyJet EZJ.L was another top faller, down 8.8 percent after reporting its first-quarter earnings. Q1 could be viewed as a positive start to the year we expect the fuel/currency impact (which is beyond the company's control) will weigh into the shares negatively (especially given the recent strong performance)," analysts at UBS said in a note.

A miss in fourth quarter earnings also weighed on Philips PHG.AS , which dropped 1.8 percent. The medical equipment maker also disclosed a conflict with the U.S. government over defibrillators it sold in 2015 and before.

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