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European shares slip, Vodafone drops after results
May 20, 2014 / 7:57 AM / 4 years ago

European shares slip, Vodafone drops after results

LONDON (Reuters) - The pan-European FTSEurofirst 300 index .FTEU3 slipped on Tuesday as Vodafone, the world’s second-largest mobile network operator, sank after reporting huge impairment costs.

The curve of the German share price index DAX board is pictured at the Frankfurt stock exchange May 2, 2014. REUTERS/Remote/Stringer

Vodafone fell 3.8 percent, making it the biggest faller on the FTSEurofirst 300, after it recorded 6.6 billion pounds in impairments due to fierce competition and regulatory changes in Europe.

“The writedowns across several European regions are further proof of the challenges the company is facing, with underlying profit continuing to move in the wrong direction,” said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.

At 0954 BST, the FTSEurofirst 300 index .FTEU3, which last week hit a six-year high of 1,372.81, was down 0.15 percent at 1,356.86 points.

Bucking the fall, Credit Suisse CSGN.VX advanced 2.7 percent after agreeing to pay a $2.5 billion fine to U.S. authorities for helping Americans evade taxes. Some analysts said it was a relief for investors that the issue was settled.

“(The penalty) was no worse than expected,” Michael Hewson, CMC Markets’ senior analyst, said. “It’s one piece of uncertainty that’s now in the rear view mirror.”

The Swiss bank’s chief financial officer said it has seen no material impact on its business from the settlement.

“This is not a lot of money compared to settlements before,” said Andy Ash, head of sales at Monument Securities. “These are the first people who admitted that they were wrong and I think the market, whether they’re right or wrong, have taken it that they got away lightly.”

Some said the market may need to consolidate its gains after last week’s six-year high.

“I am cautious on the market’s outlook in the near term and think that we are in an early stage of a consolidation phase. This week’s manufacturing data from Europe and the United States could set the stock market’s short-term direction,” said Christian Stocker, equity strategist at UniCredit in Munich.

Additional reporting by Tricia Wright and Francesco Canepa; Editing by Lionel Laurent and Hugh Lawson

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