* FTSEurofirst 300 down 0.6 percent
* BG accounts for quarter of index points drop
By Tricia Wright
LONDON, Oct 31 (Reuters) - European stocks dipped on
Wednesday, led by heavyweight British oil and gas firm BG Group
after it warned it would show no production growth next
The FTSEurofirst 300 closed 0.6 percent lower at
1,096.38, reflecting weakness on Wall Street, which reopened
following a two-day stoppage after super storm Sandy caused
widespread damage to the U.S. eastern coast.
BG Group sank 13.7 percent in hefty trading volume of more
than sixteen times its 90-day daily average, accounting for
nearly a quarter of the total index points fall.
"A massive drop, but I think it's an overreaction.
Production guidance is down, but that's a timing issue - nothing
permanent," Ed Woolfitt, head of trading at Galvan Research,
Elsewhere, steelmaker ArcelorMittal, which plans
to slash its dividend after tumbling to a third-quarter loss,
dropped 6.4 percent.
There was disappointment too for Barclays, already
rocked by an interest rate-rigging scandal. The bank fell 4.7
percent after it unveiled two new U.S. regulatory investigations
into its financial probity and said third-quarter profits fell
by a fifth due to charges for the mis-selling of insurance.
"European markets are quieter today than you would expect
for the last day of the month. The big question remains if the
market has run ahead of itself with company warnings continuing
to dominate the headlines," said Lex van Dam, hedge fund manager
at Hampstead Capital, which manages around $500 million of
Forty-four percent of European companies have so far missed
expectations in the current quarter, according to Thomson
Reuters Starmine. While firms on the whole have reported 19
percent growth in earnings in the third-quarter year-on-year,
that has still missed expectations by about 0.4 percent.
Investors were also treading with caution in the run-up to
major data releases, including the October survey of
manufacturing activity in China on Thursday, and Friday's
monthly U.S. jobs report - the most anticipated data to be
released before the election.
There were some bright spots on Wednesday. European airlines
Air France-KLM and Lufthansa enjoyed
respective gains of 8.4 percent and 7.3 percent in brisk volumes
after posting results and outlooks which reassured investors.
Both firms announced cost-cutting measures in order to
maintain margins against a depressed macro economic outlook.
And results from its peers helped propel British Airways
owner International Airlines 1.7 percent higher.