UPDATE 2-European shares dip on high yields and profit-taking; banks rally

  • Reuters
  • Stock Market News
UPDATE 2-European shares dip on high yields and profit-taking; banks rally
Credit: © Reuters.

* Nokia surges to top of STOXX 600

* China sales drive Unilever Q1 beat

* Bank shares up 1.4% to 14-month highs (Updates to market close)

By Sruthi Shankar and Ambar Warrick

April 29 (Reuters) - European stocks ended lower on Thursday, even as bank shares hit 14-month highs on strong quarterly earnings, as a rise in euro zone bond yields saw investors lock in profits at near-record levels.

The pan-European STOXX 600 index .STOXX fell 0.3% to 438.77, coming further off a record peak of 443.61 hit last week.

Traders cited the pullback to investors taking in profits after "stellar results". The STOXX 600 had surged to record highs on anticipation of a strong earnings season, as well as optimism over steady COVID-19 vaccination programs.

Bank stocks .SX7P were the best performers for the day, as Standard Chartered STAN.L added another notch to a series of strong earnings reports this week, including those from HSBC HSBA.L and Santander SAN.MC . sector was also supported by a jump in euro zone bond yields, after U.S. economic growth and German inflation data came in higher than expected, strengthening the case for a pullback in central bank stimulus. Treasury yields also hit a two-week high. GVD/EUR US/

But the rise in yields put pressure on other European sectors, particularly cyclical stocks that have rallied this year. Travel and leisure stocks .SXTP , the best-performing European sector this year, fell 0.7%, coming off record highs.

Automobile stocks .SXAP led losses on Thursday with a 2.6% fall after U.S. carmaker Ford (NYSE: F ) F.N said a global semiconductor shortage may slash second-quarter production by half. European earnings are seen jumping 71.3% in the first quarter, according to Refinitiv IBES data. Almost a third of the STOXX 600 companies have reported so far, and a higher-than-usual 68% have topped profit estimates.

Consumer goods giant Unilever ULVR.L rose 3.3% as a pick-up in home cooking and a strong economic recovery in China drove better-than-expected quarterly sales. telecom network equipment maker Nokia NOKIA.HE surged 8.4% to the top of the STOXX 600, as growth in sales of network and 5G equipment boosted its earnings. majority of the reported firms sound constructive on the outlook for the remainder of the year," European equity strategists at Barclays (LON: BARC ) wrote in a note, but added that the high expectations had been priced in.

Among decliners, steel pipe maker Tenaris ' TENR.MI Milan shares fell 6.8% and were among the top losers on the STOXX 600 after the company posted a bigger-than-expected 30% fall in first-quarter core profits. wind farm developer Orsted ORSTED.CO fell 6.7% after lower wind speeds and cable problems hit its first-quarter earnings.

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