January 25, 2018 / 8:43 AM / 3 months ago

European shares dip as focus turns to ECB amid rising euro

LONDON, Jan 25 (Reuters) - European shares opened in negative territory on Thursday as investors wait to see how the European Central Bank will react to a fast-rising euro and a faltering dollar.

The pan-European STOXX 600 index was down 0.2 percent by 0824 GMT, while Germany’s exporter-heavy DAX fell 0.4 percent and France’s CAC 40 edged up 0.1 percent.

“We expect (ECB head) Draghi to continue to strike a dovish tone at Thursday’s ECB meeting”, said BNP Paribas analysts, adding that any decline in the common currency would be “moderate”.

Trading updates helped to dampen investors’ mood. Drinks company Diageo said its sales growth was crimped by the strengthening pound. Conversely, the currency move was good news for British clothing retailer Next, as RBC upgraded the stock.

In the tech sector, Software AG fell 3.7 percent and it reported a decline in third-quarter core profits as its digital, database and consulting divisions all showed lacklustre growth.

Nordic bank Nordea gave a disappointing update with fourth quarter operating profit below market expectations and fell 2.5 percent.

Clariant sustained the second worst fall, down 4.8 percent as activist investor White Tale sold out of the speciality chemicals group after failing to win an independent strategic review and board seats.

British lender Close Brothers Group gave a different picture — seeing a rise in first-half profit, driven by strength in banking and asset management and higher trading income from market maker Winterflood. The shares saw the best performance for the STOXX 600 with a gain close to 6 percent. (Editing by Tom Pfeiffer)

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