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European shares fall on dour earnings, Fed minutes sour sentiment By Reuters

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© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 16, 2023. REUTERS/Staff/File Photo

By Shashwat Chauhan

(Reuters) -European shares slipped on Thursday as downbeat earnings and BAE Systems (OTC:) weighed, while investors were in risk-off mode after minutes from the U.S. Federal Reserve’s July meeting hinted at rates remaining higher for longer.

The pan-European fell 0.4%, hitting a more than one-month low.

BAE Systems shed 4.5% after Britain’s largest defense company said it agreed to buy Ball Corp (NYSE:)’s aerospace assets for about $5.55 billion in cash.

Europe’s aerospace and defense sector dropped 1.3%.

Adyen NV tumbled 22.6%, falling to the bottom of the STOXX 600 after the Dutch payments processor missed analyst estimates and its own ambitious first-half earnings targets. The industrial goods and services sector slumped 1.6%.

Amsterdam stocks fell 1.1%, reaching their lowest level in over a month.

Meanwhile, Wall Street futures edged higher after markets closed lower on Wednesday as minutes showed Fed officials were divided over the need for more interest rate hikes.

“It seems there is some disagreement on whether there should be more hikes or not,” said Anthi Tsouvali, multi-asset strategist at State Street (NYSE:).

“There’s one thing certain rate hikes are still on the table and rates will remain elevated for longer.”

Bond yields across Europe jumped, with sharp spikes in Italy and Germany pressuring equities. [GVD/EUR]

Stocks in Norway eased 0.1% after the country’s central bank raised its benchmark interest rate by 25 basis points (bps) to 4.0%.

“Norges Bank is very close to the end of its tightening cycle,” wrote Jack Allen-Reynolds, deputy chief euro-zone economist at Capital Economics.

In a bright spot, the basic resources sector added 0.6%, its first gain in six sessions.

The STOXX 600, weighed by signs of slowing growth in China, has underperformed its U.S. peers this year, with its 6.8% gain well below the 14.7% jump in the.

Among individual stocks, Aegon (NYSE:) fell 3.9% after the Dutch insurer’s Solvency II ratio at the end of June missed estimates.

Nibe lost 5.8% after the Swedish heat pump maker reported second-quarter results below estimates.

Geberit fell 4.4% after the Swiss plumbing supplies maker cut its full-year outlook citing significant deterioration in the construction industry.