LONDON: European shares fell on Tuesday, weighed down by a slump in Linde after the world’s biggest industrial gases company by sales cut its 2017 profit target.
Linde tumbled 14.3 percent, dragging down sector peer Air Liquide, and together they took the most points off the pan-European FTSEurofirst 300 index.
The index fell 0.4 percent. The euro zone’s blue-chip Euro STOXX 50 retreated 0.8 percent, while Germany’s DAX , which includes Linde as a constituent, dropped 1.1 percent.
Mirabaud Securities equity sales executive Rupert Baker said Linde’s woes showed that the recent European stock market rally was of a “low quality”, driven by prospects of more aid from the European Central Bank rather than robust earnings.
“Many of Europe’s leading companies are not producing the sort of upgrades one would expect from them,” he said.
However, European banks <.SX7P rose, helped by their British counterparts after the top UK banks passed the latest Bank of England “stress tests”.
German utility RWE also surged nearly 17 percent on plans to hive off its renewables, grids and retail units into a separate entity and sell a 10 percent stake in an initial public offering late next year.
