LONDON, May 10 (Reuters): European shares retreated on Friday as a disappointing business update from telecoms group Telefonica sobered the mood from a rally the previous day.
The pan-European FTSEurofirst 300 index, which on Thursday hit a 2014 peak of 1,359.07 points that marked its highest level in around six years, closed down 0.3 per cent at 1,355.40 points.
Shares in Spain's Telefonica fell 2.6 per cent after the company posted a 23 per cent fall in first-quarter net profits, missing market expectations.
Energy services group Petrofac slumped by 15.2 per cent after it issued a profit warning.
Around two-thirds of companies listed on the pan-European STOXX Europe 600 index have posted first-quarter updates so far. Half of them have missed consensus earnings forecasts, according to Thomson Reuters StarMine data.
Some investors had hoped strong earnings that would drive any further gains in share prices, with valuations now sitting at bloated levels after a bumper 2013.
"PEs (price/earnings ratios) can only expand for a certain amount of time until investors say okay, right, we need to see something delivered, and this earnings season ... has been a bit disappointing," James Butterfill, head of equity strategy at Coutts, said.
European shares slip after rally
FE Team | Published: May 11, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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