European stocks slide on China, US technology woes

European shares sank Wednesday, with the mining sector hit by renewed concern over China and after disappointing earnings figures from US technology giants Apple, Yahoo and Microsoft.

London's benchmark FTSE 100 index dropped 1.02 percent to stand at 6,699.70 points in early afternoon deals, with mining companies hit hard by stubborn worries over Chinese demand.

Frankfurt's DAX 30 shed 0.62 percent to 11,532 points and the CAC 40 in Paris lost 0.39 percent to 5,086.40 points compared with Tuesday's close.

In foreign exchange, the euro firmed to $1.0943 from $1.0942 late in New York on Tuesday, as dealers awaited a second Greek parliamentary vote on its vast reforms-for-cash bailout deal.

London's mining sector faced fierce selling pressure, with Anglo American down 4.36 percent to 824.10 pence and BHP Billiton sliding 4.19 percent to 1,199 pence, with sentiment dented by sliding metal prices.

"The London market has been hit hardest by the mining sector, which is taking its cues from the financial turbulence in China," said analyst David Madden at trading firm IG.
"The wheels are starting to come off in China, and if Beijing is having trouble keeping its stock market in check, it does not inspire confidence in its position as the biggest importer of minerals in the world."

London-listed ARM Holdings, whose microchip designs are used to help power Apple's iPads, saw its share price dive 3.75 percent to 1,000 pence on the Apple results, despite an upbeat outlook and dividend hike from the British chipmaker.

"Chipmaker ARM Holdings issued an optimistic outlook for the second half, and it also rewarded shareholders with a healthy boost to its dividend, but the move in Apple in after-hours trading led the stock lower," Madden added.

Overnight, Apple posted a 38 percent jump in quarterly net profit, but shares slid as analysts had expected more, while revenue forecasts weighed.
The US tech giant's profit soared to $10.7 billion on surging iPhone sales in the quarter that ended on June 27, from $7.7 billion a year earlier.

Elsewhere in the sector, Yahoo revealed it had swung to a loss of $22 million in the second quarter, but revenues grew as the Internet pioneer refocused its efforts on mobile and other growing sectors.

Microsoft meanwhile announced a net loss of $3.19 billion in the past quarter, blaming a hefty writedown on the smartphone business it acquired from Nokia.

- Tech earnings disappoint -

"UK and European equities have followed the wider global market lower after both new and old technology results disappointed," said Rebecca O'Keeffe, investment head at broker Interactive Investor.
"Since Google's performance last week, expectations had been running high that the sector would provide the momentum for further equity market growth.

"However, with Apple, Microsoft and Yahoo all failing to meet investor expectations, the outlook has paled amid concerns that prices in the sector have overshot."

Europe's equities had hit reverse Tuesday as volatile commodity prices and company results hit shares, with markets giving up some of the gains won over the previous nine trading days.

Asian markets mostly retreated following the negative lead from Wall Street, where sentiment was also hit by poor earnings news from IBM and United Technologies.

Elsewhere, the British pound edged higher after the Bank of England (BoE) said its nine-member monetary policy committee had voted unanimously earlier this month to hold interest rates.

BoE governor Mark Carney had indicated last week that Britain's record-low 0.50 percent lending rate could start to rise at the turn of the year.