European equities tumble after Wall Street, Tokyo hit reverse

Europe's stock markets tumbled Thursday on a wave of disappointing earnings reports, compounded by a weaker start on Wall Street and a slump in Tokyo, traders said. Prices on Wall Street declined as investors took profit from the recent record highs. And that put extra pressure on main stocks indices in Frankfurt, Paris and London, which had already been in the red following the release of quarterly corporate earnings reports that fell short of expectations. The declines came despite news that the European Union hiked its 2017 eurozone economic growth forecast to 2.2 percent from 1.7 percent. However, the bloc slashed Britain's forecast to 1.5 percent from 1.8 percent as Brexit uncertainties weigh, hitting London sentiment. "Equity indices are lower, with the German DAX underperforming once again as disappointing earnings reports add to unwelcome euro strength," said Accendo Markets analyst, Mike van Dulken. Already in Asia, Japanese stocks had finished in the red, suffering a sharp reverse after earlier hitting fresh 26-year highs, while most other Asian indices also fell. "Markets took their cue from a volatile session in Japan, where the Nikkei performed an impressive handbrake turn after hitting fresh multi-year highs," said IG analyst Chris Beauchamp in London. "This sudden drop after the relentless gains over the past two months caught investors on the hop." China and the United States meanwhile signed more than $250 billion in business deals, including $37 billion worth of Boeing planes, as US President Donald Trump held talks with Chinese counterpart Xi Jinping in Beijing. Trump criticized Beijing's "one-sided and unfair" trade surplus with his country, but said he did not blame China for the situation, instead hitting out at past White House administrations "for allowing this out-of-control trade deficit to take place and to grow". On the upside in Asia, Shanghai rose 0.4 percent and Hong Kong advanced 0.8 percent, with traders cheering forecast-beating inflation figures from China that provided fresh hopes the huge economy is stabilising. - Burberry overhaul spooks investors - Back in London, shares in British luxury fashion giant Burberry slumped on disappointing earnings and a costly strategy overhaul. The group's share price tumbled 9.32 percent to £18, topping London's fallers board. "Burberry posted a 24-percent jump in first-half pre-tax profits, but it still missed expectations," noted Madden. "Traders were more interested in the company's plans -- which involves focusing more on the high end of the luxury goods market. The stores they are retaining will be revamped at a high cost, and this is spooking traders." - Key figures around 1440 GMT - New York - DOW: DOWN 0.5 percent at 23,451.12 points London - FTSE 100: DOWN 0.7 percent at 7,482.62 Frankfurt - DAX 30: DOWN 1.3 percent at 13,211.21 Paris - CAC 40: DOWN 1.0 percent at 5,414.64 EURO STOXX 50: DOWN 1.0 percent at 3,618.44 Tokyo - Nikkei 225: DOWN 0.2 percent at 23,868.71 (close) Hong Kong - Hang Seng: UP 0.8 percent at 29,136.57 (close) Shanghai - Composite: UP 0.4 at 3,427.79 (close) Euro/dollar: UP at $1.1619 from $1.1604 Pound/dollar: UP at $1.3105 from $1.3087 Dollar/yen: FLAT at 113.46 yen Oil - Brent North Sea: FLAT at $63.48 per barrel Oil - West Texas Intermediate: FLAT at $56.81 burs-spm/jh