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European shares drop on U.S. growth concerns, downbeat earnings

February 4, 2014

European shares tumbled on midday trading on Tuesday, trailing losses in U.S. and Asia , on worries of slowdown in U.S. growth and after the release of downbeat earnings. A report released yesterday showed that U.S. manufacturing sector expanded at the weakest pace in eight months in January, where the ISM dropped to 51.3 from 56.5 a month earlier. As of 15:00 GMT , another data may show that U.S. factory orders in the world's biggest economy slumped 1.8 percent in December from a prior of 1.8 percent gain. Fears of a slowdown in U.S. growth fanned speculations the Fed would slow the pace of stimulus cut. Still, there are ongoing fears of emerging markets rout after the recent capital out flight which threatened the future of global growth. This week, eyes will focus on monetary decisions by the ECB and BOE as well as the awaited U.S. non-farm payrolls report. On the other hand, disappointing earnings results by BP and chip designer ARM added to worries. As of 07:00 EST , STOXX EUROPE 600 slipped 0.53% to record 316.52 points. Telecommunications led the decline with a drop of 0.94%, where the largest losses were recorded by Vestas Wind Syst as its shares plummeted 6.99% to 166.20 DKK . The largest gains, on the other hand, were led by Kesko Oyj-B as its equities rose 9.24% to 29.56 euros . Regarding other major European indices, Germany`s DAX 30 slipped 1.06% to 9089.09 points. France's CAC 40 index slumped 0.21% to 4099.09 points, and FTSE 100 slipped 0.46% to 6435.60 points.

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Source: Financial Markets

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