Europe midday: Shares fall as east Ukraine hit by shelling from Donbas

European shares slipped into the red at midday on Thursday after Ukraine was shelled from the rebel-held Dobas region in the east of the country and the US said Russian claims of a partial troop withdrawal from border areas were false.

The pan-European Stoxx 600 index was down by 0.13%. Wall Street was weaker overnight and US futures were also indicating a fall in shares.

Reports emerged late Thursday morning that a kindergarten on the Ukrainian side of the border had been struck by shelling, with three people confirmed injured. The Organisation for Security and Cooperation in Europe, which has been monitoring the long-running Donbas conflict, reported “multiple incidents of shelling” in eastern Ukraine.

Meanwhile, the US overnight accused Russia of adding 7,000 troops to the 150,000 already camped at the Ukrainian border, branding as “false” the Kremlin’s claims that it had begun a partial withdrawal of its military presence.

A meeting of NATO defence ministers in Brussels concludes on Thursday.

Investors were also digesting the latest minutes from the US Federal Reserve, which showed officials had started preparing to raise interest rates and unload the trillions of dollars of bonds on the central bank’s balance sheet.

In equity news, shares in Asia focused bank Standard Chartered fell as it missed annual earnings estimates.

Reckitt Benckiser shares rose as the consumer goods company suffered an £804m annual operating loss caused by the sale of its Chinese infant formula business but was upbeat about growth.

French luxury goods maker Kering jumped after the company reported sharp growth in fourth-quarter sales as marketing investments and 100th anniversary events helped boost the popularity of its top Gucci brand.

Airbus rose 1.2% after the world's largest plane maker predicted 720 jetliner deliveries and higher profits this year.

Commerzbank gained after the German lender swung to a better-than-expected fourth-quarter and painted an upbeat outlook for 2022.

Carrefour shares rose as the French supermarket chain after reporting an improved outlook and higher profits on Wednesday.

Continental shares were higher after Manager Magazin reported the German auto parts supplier is considering splitting into four separate businesses.

Swedish cloud communications company Sinch slumped 17% on news it had signed a new loan facility.