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European shares claw back declines, Capita slumps

Published 31-01-2018, 02:12 pm
© Reuters.  European shares claw back declines, Capita slumps
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LONDON, Jan 31 (Reuters) - European shares staged a partial recovery from a slump in the previous session as investors surveyed a mixed back of results from some of the region's biggest industrial names.

It was another dark day for struggling UK outsourcer Capita CPI.L , and a pay day for short-sellers, with the shares down 35 percent after the company warned on profit, announced a rights issue and suspended its dividend. pan-European STOXX 600 .STOXX gained 0.2 percent by 0830 GMT, in line with euro zone stocks. Britain's FTSE 100 underperformed. Other country benchmarks were set to end the month on a positive note.

Results undershooting the market's expectations caused some big pullbacks in share prices, with investors particularly impatient with earnings misses in this high-valuation environment.

Ericsson (BS:ERICAs) ERICb.ST sank 7.6 percent after the telecom equipment maker reported a deeper than expected loss, and said the Chinese market would continue to decline. collector Intrum Justitia INTRUM.ST tumbled 7.5 percent after its fourth-quarter revenue and earnings missed expectations. ELUXb.ST led European gainers, up 5.3 percent after the home appliance maker reported a bigger than expected rise in fourth-quarter profit. order boom helped truck maker Volvo VOLVb.ST raise its outlook, driving the shares up 4.4 percent. Finland's Elisa ELISA.HE gained 5.2 percent after its results beat expectations.

The world's largest producer of steel, ArcelorMittal MT.AS , fell 2.2 percent to the bottom of the CAC 40. The firm resumed its dividend but the announced payout of $0.10 undershot analysts' expectations of $0.30.

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