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UPDATE 1-European shares dip as financials curb Apple-led tech rally

Published 02/08/2017, 07:06 pm
Updated 02/08/2017, 07:10 pm
© Reuters.  UPDATE 1-European shares dip as financials curb Apple-led tech rally
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* STOXX 600, blue chips down 0.2 pct

* Chipmakers buoyed by Apple results

* SocGen leads banks lower after earnings

* Energy, miners weaker; Rio Tinto drops (Adds quotes and details, updates prices)

By Kit Rees

LONDON, Aug 2 (Reuters) - Semiconductor firms' shares were a bright spot on Wednesday in a lacklustre European market, weighed down by a fall among mining stocks and banks.

The pan-European STOXX 600 .STOXX index as well euro zone bluechips fell 0.2 percent. Britain's FTSE 100 .FTSE slipped 0.3 percent.

Tech stocks .SX8P were among the strongest sectoral performers with Apple AAPL.O suppliers Dialog Semiconductor DLGS.DE and AMS AMS.S jumping 3.8 percent and 4.7 percent respectively after optimism on future demand for the iPhone lifted Apple shares to a record high overnight. big movers that we see in the German market today are in technology," David Madden, market analyst at CMC Markets UK, said.

The rise in tech was not enough to outweigh falls among mining firms .SXPP and oil stocks .SXEP , which declined on the back of weaker metals and oil prices.

Iron ore miner Rio Tinto RIO.L was the biggest faller in the basic resources sector, dropping 2.3 percent after it reported first half earnings. Analysts said they were slightly behind their expectations. The firm also announced an interim dividend and an additional $1 billion share buyback.

"We were disappointed at the increased buyback - we would have preferred to see a higher dividend instead," analysts at Shore Capital Markets said in a note.

CMC Markets' Madden added that results which undershot expectations were being punished more than upbeat earnings were being rewarded.

"It's almost like investors are happy to pounce on negative news and sell negative news, but they're not as keen to go out and buy when the results are good."

Valuations are already high and running above long-term averages, suggesting that good earnings are much less a surprise than earnings disappointments.

Disappointing results from Societe Generale (PA:SOGN) and Commerzbank (DE:CBKG) were a drag on euro zone banks. The sector index .SX7E fell 1.2 percent. Natixis CNAT.PA jumped around 2 percent, however, on the back of higher profits for the period.

Well-received earnings boosted shares in gambling firm William Hill WMH.L , which rocketed more than 9 percent to the top of the STOXX, while results also spurred sizeable moves in Hugo Boss BOSSn.DE and Lufthansa LHAG.DE .

Around halfway through the results season, second quarter earnings in Europe are expected to increase 13.4 percent year on year, or 11.2 percent excluding the energy sector, according to Thomson Reuters I/B/E/S.

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