ROME: European shares surrendered early gains on Thursday after disappointing updates from companies like Deutsche Bank, Saint-Gobain and Barclays and a sharp drop in mining shares.
Deutsche Bank slipped 6 percent after scrapping its dividend. Barclays was down 5.5 percent following a 10-percent drop in quarterly profits. Saint-Gobain fell 6 percent after saying its results were hit by a contraction in France.
“Deutsche Bank is cutting its dividend, and the story for the banking sector as a whole is that they are going to struggle to get back to their earlier levels of profitability, given the amount of regulation going on,” said Clairinvest fund manager Ion-Marc Valahu.
The pan-European FTSEurofirst 300 index was down 0.3 percent at 1,480.12 points by 0939 GMT after rising to a high of 1,490.81 points earlier in the session.
European equities turned lower after metals prices extended losses following a rally in the dollar on the prospect of a U.S. rate increase. That would make commodities more expensive for holders of other currencies.
The STOXX Europe 600 Basic Resources index fell 2.6 percnet, the top sectoral decliner in Europe. BHP Billiton , Rio Tinto and Anglo American fell 3.4 to 5.2 percent.
The market initially shrugged off a choppy trading session in Asia after the U.S. Federal Reserve left the door open to raising interest rates this year. Analysts said higher U.S. rates might be bad for Asian markets but should support export-oriented European companies because of a stronger dollar.
Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said that a stronger dollar hurt Asian markets because companies there have lot of dollar debt in the dollar and money might flow out of the region.
