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European shares retreat after 7 sessions of gains, Cobham plunges

Published 16/02/2017, 09:13 pm
© Reuters.  European shares retreat after 7 sessions of gains, Cobham plunges
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(ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets)

* STOXX Europe 600 index down 0.3 pct

* Cobham plunges 20 pct after results

* Miners track weaker metals prices

By Atul Prakash

LONDON, Feb 16 (Reuters) - European equities fell on Thursday after seven straight sessions of gains, with weaker metal prices weighing on miners and a poor update battering shares in engineering group Cobham COB.L .

Companies like NN Group NN.AS and Drax DRX.L also dragged the market lower after their disappointing updates.

The pan-European STOXX 600 .STOXX fell 0.3 percent by 0957 GMT after recent gains to a two-month high on Wednesday. Britain's commodity-heavy FTSE 100 index .FTSE was down 0.4 percent, while Germany's DAX .GDAXI dropped 0.2 percent.

Cobham led the STOXX 600 lower after slumping nearly 20 percent to its lowest level in about 13 years and heading for its biggest-ever daily fall.

The sharp sell-off came after the company missed a profit target that had already been repeatedly lowered and took a charge on a troubled contract with Boeing (NYSE:BA), capping "an incredibly turbulent and disappointing year" for the defence and aerospace group. company said 2017 could be even worse as it struggles to fix operational problems in difficult markets. Its shares have already more than halved in the last 12 months.

"Investors are ditching the stock as it looks like the problems at Cobham go further than anyone realised when all this started. There is every reason to think that management's review of the business may throw up further concerns and more write-downs," said Neil Wilson, an analyst at ETX Capital.

Miners put pressure on the broader market. The STOXX Europe 600 Basic Resources index .SXPP fell 0.9 percent, the biggest sectoral decliner, as copper prices fell after China's overseas investment weakened and sentiment waned over demand in the world's top copper user. MET/L

Shares in Anglo American AAL.L , Antofagasta ANTO.L and Rio Tinto RIO.L fell 0.5 to 2.4 percent.

Elsewhere, Dutch insurance company NN Group NN.AS dropped 8 percent after its fourth quarter core profit missed expectations, while power producer Drax DRX.L fell 7 percent after saying it was reviewing its dividend policy.

However, broader market losses were partly offset by stronger airlines. Air France-KLM AIRF.PA jumped 6 percent after reporting better-than-expected operating profit for 2016 and said it had made a "resilient" start to 2017. in International Consolidates Airlines Group ICAG.L and Lufthansa LHAG.DE rose 1.9 percent and 2.8 percent respectively.

Mobile telecom equipment maker Ericsson (BS:ERICAs) ERICb.ST advanced 3.4 percent, the biggest gainer in the STOXX 600, on a media report saying that Cisco was open to larger acquisitions, while IT services group Capgemini CAPP.PA was up 2.7 percent after saying that it was targeting higher 2017 earnings. (Editing by Gareth Jones)

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