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European shares drop on downbeat earnings, Fed stimulus taper

January 31, 2014

European shares tumbled on midday trading on Thursday on weaker earnings as Fed stimulus taper started to take effect. Downbeat earnings reports by Roche and Nordic telecom operator TeliaSonera added to concerns. On the other hand, the Fed decided yesterday to cut its monthly bond purchases by another $10 billion to $65 billion , raising worries about the future of recovery that was underpinned by Fed's money printing. Still, there are other concerns stemming from currency devaluations in emerging economies, which prompted central banks from Turkey to South Africa to raise interest rates. Later in the day, eyes will focus on U.S. jobless claims and pending home sales reports. As of 06:54 EST , STOXX EUROPE 600 slipped 0.36% to record 321.24 points. Consumer Goods led the decline with a drop of 1.30%, where the largest losses were recorded by Serco Group as its shares plummeted 11.68% to 450.00 pounds. The largest gains, on the other hand, were led by Tryg A/S as its equities rose 5.86% to 524.00 DKK . Regarding other major European indices, Germany`s DAX 30 slipped 0.27% to 9311.86 points. France's CAC 40 index rose 0.17% to 4149.78 points, and FTSE 100 slumped 0.29% to 6525.47 points.

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Source: Financial Markets

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