* FTSEurofirst 300 fell 0.3 percent
* RSA, Lufthansa dented by dividend cuts
* BHP Billiton, Accor fall after results
By David Brett
LONDON, Feb 20 European shares fell on Wednesday
as surprise dividend cuts by RSA and Lufthansa and weak results
from the likes of Accor and BHP Billiton weighed on sentiment.
The FTSEurofirst closed down 3.01 points, or 0.3
percent, at 1,168.72.
Britain's biggest business insurer RSA was the
biggest individual faller after it unexpectedly cut its dividend
by a fifth after weak investment returns, sending its shares
down 14.2 percent.
"There would have been a lot of income funds invested in the
stock purely on the basis of its dividend, so they would have
been selling out of it today, but once it settles down investors
will realise that it was a sensible move," said Paul Mumford, a
fund manager at Cavendish.
The announcement had a knock-on effect within the insurance
sector with Aviva down 4.1 percent as Markit downgraded
its dividend forecasts for the company by up to 19 percent.
"Following the cut from RSA Insurance Group, Markit expects
Aviva to take a similar decision ... in order to reach its
targets in the 2014 Strategic Plan and considering the
macro-economic environment uncertainties," Markit said in a
Europe's biggest airline Lufthansa shed 6.2
percent after stunning markets by witholding a dividend for the
second time in three years.
Telecoms, which have the highest dividend
expectations in Europe - analysts forecast a 6.1 percent yield
in the sector over the coming 12 months - fell 1.2 percent.
Dutch telecom company KPN slipped 9.7 percent after
Mexican business magnate Carlos Slim, the world's richest man,
backed the firm's plan to raise 4 billion euros.
Europe miners suffered most, falling 2.8 percent to
their lowest level since early December 2012, weighed down by
falling metal prices with traders citing unconfirmed rumours out
of the United States of trouble at a large commodity fund.
The sector found technical resistance at its 14-day moving
average of 453.46 and there was downbeat earnings news too,
further weighing on sentiment, after global miner BHP Billiton
, down 2.4 percent, reported a 43 percent drop in
Falling earnings hit tobacco products maker Swedish Match
, down 6.8 percent, while Europe's biggest hotelier
Accor and Dutch paints and chemicals group AkzoNobel
NV shed 3.6 percent and 5.3 percent, respectively,
after both firms announced cost-cutting plans to offset weak
Upbeat outlooks, however, from the world's largest cement
maker Lafarge and French bank Credit Agricole
helped the firms' shares up 5.5 percent and 3.9
In the current reporting season, 54 percent of STOXX Europe
600 firms have posted quarterly results so far, of
which only 51 percent have beaten or met forecasts, in contrast
with Wall Street where 79 percent of S&P 500 companies
have reported results, with 77 percent meeting or beating
consensus, Thomson Reuters Starmine data show.
But weak euro zone consumer confidence will do little to
help corporates meet earnings expectations and figures, which
fell short of analyst forecasts, weighed on French,
Italian and Spanish indexes, which shed up to
Britain's benchmark FTSE 100 touched fresh five-year
highs but failed to close above a key technical level, leading
some traders to expect a minor, near-term sell-off. Traders said
the fact the index could not hold above the 6,400 point level,
seen by many as key to more near-term gains, meant it was now
more likely that the market would fall in the coming sessions.