European stocks falter as pharma sector falls

By Julien Ponthus

LONDON (Reuters) - European shares dipped on Wednesday as poor corporate earnings in the pharmaceutical sector weighed on sentiment already soured by trade tensions, with Washington preparing tariffs on another $16 billion of Chinese goods.

The pan-European STOXX 600 <.STOXX> ended the session down 0.2 percent, with the European healthcare index <.SXDP> leading losers, down 1 percent.

Worries over global trade and tariffs continue to pressure euro zone stocks, with the Euro Stoxx <.STOXXE> index down 0.6 percent so far in August.

"We are cautious on Europe, given the possible impact on growth from U.S. trade measures, especially on export dependent Germany," Luca Paolini, chief strategist at Pictet Asset Management, said in a note.

Trading updates from Danish drugmakers Novo Nordisk and Lundbeck disappointed investors and their shares dropped 6 percent and 14 percent respectively.

Analysts at Berenberg said Novo Nordisk's earnings were "a fairly lackluster set of results", while Jefferies analysts said sales of Lundbeck's key products were shy of consensus.

Britain's UDG Healthcare also took a hit, down more than 10 percent after flagging weakness at its contract sales and patient support services operations.

Other blue-chip results also weighed, with Dutch food retailer Ahold Delhaize (NYSE: AD) down 1.6 percent.

Italian bank BPER Banca lost nearly 6 percent, with one analyst citing disappointing quarterly interest income.

French supermarket chain Casino shed 6 percent after broker Bernstein cut the stock to "underperform".

Among better-received trading updates, Nokian Tyres jumped 3.8 percent after beating earnings expectations and Dutch bank ABN Amro added 3.5 percent after reporting second-quarter profits.

Overall, though, the earnings season hasn't been as strong as in the United States; actual earnings growth for the MSCI EMU index is clocking in at 7.6 percent, according to I/B/E/S data.

A strong U.S. earnings season has also fueled optimism about economic strength there, with S&P 500 firms seeing a 23.5 percent rise in their April-June profits, according to Thomson Reuters data.

(Reporting by Julien Ponthus and Kit Rees; Editing by John Stonestreet and Mark Potter)

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