Europe midday: Stocks edge lower, Nestlé results disappoint

European equity markets drifted lower on Thursday weighed down by weak results from Swiss consumer goods giant Nestlé amid wider profit-taking following several days of gains, while some bank stocks were buoyed by “massive” prospective tax plans from President Donald Trump.

At midday, the benchmark Stoxx Europe 600 index was down 0.35% to 370.18, Germany’s DAX was fell 0.24% to 11,765.15 and France’s CAC 40 slipped 0.43% to 4,903.79.

The continent’s stocks had posted seven days of gains in a row which helped global markets reach record highs following suggestions of an interest rate hike - possibly as soon as March - by US Federal Reserve chief Janet Yellen and looming tax cut plans from Trump.

The potential for interest rate hikes propelled bank stocks higher. Santander, UBS and Deutsche Bank were up 1.28%, 1.01% and 2.3%, respectively.

Mike van Dulken, head of research at Accendo Markets, said: “Equity markets are under the cosh this morning from a hat trick of pressures. A dollar sell-off has produced currency hindrance by way of sterling and euro strength to hinder the internationally exposed. Some large-caps have gone ex-dividend.

“Miners are failing to see a weak dollar benefit base metals prices, even if oil is higher. That said, US markets closing at record highs for a fifth straight session, something they haven't done in 25 years, suggests the Trump trade is still being embraced, meaning this could be just another blip amid a longer-term uptrend.”

Oil prices were slightly higher with Brent crude up 0.07% to $55.79 per barrel and West Texas Intermediate up 0.09% to $53.16.

In company news, Nestlé fell 2.19% after the maker of Kit-Kat and Nescafe said that profit fell and missed expectations for 2016. Net profit was down to SFr8.5bn (£6.78bn) from SFr9.1bn the previous year and below expectations of SFr9.59bn. It also revised its sales growth target for 2017 to between 2% and 4%.

Air France surged 8.34% after the airline’s full year results exceeded expectations with a 35% increase in earnings. Shares in peers IAG, easyJet and Deutsche Lufthansa also rose 1.69%, 0.42% and 2.41%, respectively.

London-listed Cobham tumbled 15.26% after it issued a profit warning for 2016 and said it will be hard to meet expectations for this year.

AstraZeneca, BP, Shell and Imperial Brands went ex-dividend.

On the data front, French unemployment slipped to 10% in the fourth quarter of 2016 from 10.1% in the third. This was above the 9.8% consensus forecast.

Car registrations in the European Union climbed 10% on extra selling days to 1.2m vehicles in January compared to last year.

The minutes of the European Central Bank meeting in January when it stood pat on rates, will be published at 1230 GMT.