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UPDATE 1-European shares retreat after 7 sessions of gains, Cobham plunges

Published 17/02/2017, 04:08 am
© Reuters.  UPDATE 1-European shares retreat after 7 sessions of gains, Cobham plunges
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* STOXX Europe 600 index down 0.4 pct

* Cobham plunges 20 pct after profit miss

* Miners track weaker copper prices

* Air France rallies after strong update (Adds details, closing 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 0.4 percent after recent gains to a two-month high on Wednesday.

Cobham led the STOXX 600 lower after slumping 15.3 to its lowest level since August 2005.

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 0.2 to 2 percent.

Elsewhere, Dutch insurance company NN Group NN.AS dropped 7.6 percent after its fourth quarter core profit missed expectations, while power producer Drax DRX.L fell 5.3 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 12.6 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 0.6 percent and 2.2 percent respectively.

Shares in German fashion house Hugo Boss BOSSn.DE rose 6.6 percent, the biggest gainer in the STOXX 600, after a report that the holding company of Belgium's richest man, Albert Frere, has taken a stake of nearly 3 percent and wants to increase it further. telecom equipment maker Ericsson (BS:ERICAs) ERICb.ST advanced 4.4 percent on a media report saying that Cisco was open to larger acquisitions, while IT services group Capgemini CAPP.PA added 3 percent after saying that it was targeting higher 2017 earnings.

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