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European shares steady, although Ericsson slumps
October 12, 2016 / 9:06 AM / a year ago

European shares steady, although Ericsson slumps

* STOXX 600 flat

* Ericcson slumps after profit warning, Nokia also falls

* Airline stocks, PageGroup gain (Adds detail and quotes, updates prices)

By Kit Rees

LONDON, Oct 12 (Reuters) - European stock markets were steady on Wednesday, although Sweden’s Ericsson led the region’s technology stocks down to a one month-low after issuing a profit warning.

The STOXX 600 index struggled to find direction and traded flat in percentage terms by 0848 GMT, having fallen in the previous session.

Germany’s DAX also fell 0.2 pct, while Britain’s blue-chip FTSE 100 index dropped 0.5 percent. The UK’s FTSE 250 mid-cap index was down 0.4 percent.

Telecoms equipment maker Ericsson dropped more than 16 percent to its lowest point since 2008 after warning that its third-quarter profit would be “significantly lower” than expected after a downturn in its mobile broadband business had accelerated.

The world’s biggest maker of mobile network equipment reported a 94 percent plunge in quarterly operating profit and tumbling sales at its core networks division.

“They’re near the bottom of the pile in terms of mobile now, in the age of Apple and Samsung, Ericsson don’t really have a look-in,” Jonathan Roy, advisory investment manager at Charles Hanover Investments, said.

“They haven’t really come up with any new or exciting products, so I wouldn’t be surprised to see them go further down.”

Peer Nokia also dropped, down 4.6 percent, set for its biggest daily loss since June 27.

Among the top risers, however, Deutsche Lufthansa gained 3.1 percent after an upgrade from Kepler Cheuvreux, while budget airline easyJet also rose after a bond issue.

UK staffing firm PageGroup extended its gains from the previous session, up 5.2 percent following a spate of target price upgrades. The company reported a set of better than expected results in the previous session.

“Trading in the third quarter was better than expected as demand in the UK held up better than feared,” analysts at Barclays said, adding that they expected a more gradual decline in demand over 2017 and 2018. (Reporting by Kit Rees; Editing by Sudip Kar-Gupta and Raissa Kasolowsky)

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