UPDATE 2-European stocks slip as lockdown worries resurface


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 (For a live blog on European stocks, type LIVE/ in an Eikon
news window)
    * Healthcare stocks rise the most 
    * Logitech falls from record high after results  
    * Retailers, miners among big decliners

 (Updates to market close)
    By Sruthi Shankar
    Jan 19 (Reuters) - European stocks slipped on Tuesday,
dragged down by retailers, travel and banking stocks, as the
possible extension of Germany's coronavirus lockdown raised
concerns about the damage to earnings and economic growth.  
    After gaining almost half a percent at the open, the
pan-European STOXX 600 index  .STOXX  inched lower as the
session wore on and closed down 0.2%.
    Germany's DAX  .GDAXI  also fell 0.2% even as the ZEW
economic research institute's survey showed investor sentiment
in Europe's largest economy rose by more than expected in
January.  urn:newsml:reuters.com:*:nL8N2JU2A9  
    France's CAC 40  .FCHI  declined 0.3% and London's FTSE 100
 .FTSE  slipped 0.1%.
    European bourses started the day in optimistic mood over
China's economic strength after data confirmed the world's
second-largest economy was one of the few to grow over 2020.  
    However, the prospect of longer lockdowns kept investors on
edge as German Chancellor Angela Merkel and state premiers
agreed to extend a lockdown for most shops and schools until
Feb. 14, sources told Reuters.  urn:newsml:reuters.com:*:nL1N2JU0FZ
    Defensive sectors that tend to be less affected by economic
cycles such as healthcare  .SXDP  and utilities  .SX6P  gained,
while retail  .SXRP , mining  .SXPP  and travel and leisure
 .SXTP  took the biggest hits.
    Among the companies that reported quarterly results,
Switzerland's Logitech  LOGN.S  fell 6.4% after hitting an
all-time high earlier in the wake of raising its 2021 sales
growth and profit outlook.  urn:newsml:reuters.com:*:nL4N2JU0NP
    Miner Rio Tinto  RIO.L  slipped despite reporting a 2.4%
rise in fourth-quarter iron ore shipments, helped by industrial
activity in top consumer China.  urn:newsml:reuters.com:*:nL1N2JT1SH 
    As European earnings gather pace, analysts are predicting a
26.2% decline in fourth-quarter profit for companies listed on
the STOXX 600, as per Refinitiv IBES data.
    However, the main worry for investors is that an expected
43.5% and 81.1% rebound in first and second quarter earnings
could be called into question as the European economy reels from
the impact of stringent COVID-19 lockdowns.  urn:newsml:reuters.com:*:nL8N2JU3ZM
    "Going in to the Q4 earnings season investors are more
likely to be concerned with the outlook than historic
performance given that the situation with the virus is changing
so quickly," said Edward Stanford, head of European equity
strategy at HSBC. 
    "With the prospects for economic growth potentially coming
under pressure, we see a little bit of downward pressure on
consensus earnings for Europe for 2021." 
    Danone  DANO.PA  rose 2.7% after an activist investor called
on the French food group's chief executive to step down after it
took a stake in the company late last year.  urn:newsml:reuters.com:*:nL1N2JU0G9
    Weighing on the FTSE 100, Ladbrokes owner Entain  ENT.L 
tumbled 11.9% after U.S. casino operator MGM Resorts  MGM.N 
ditched plans to buy the British company after it rejected an
$11 billion takeover approach this month.  urn:newsml:reuters.com:*:nL4N2JU2W7

 (Reporting by Amal S and Sruthi Shankar in Bengaluru; Editing
by Arun Koyyur and Mark Potter)
 ((Amal.S@thomsonreuters.com; within U.S.+1 646 223 8780;
outside U.S. +91 80 6749 3677;))

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