European shares slip as downbeat earnings from Nokia, BE Semiconductor weigh

(Reuters) – European shares slipped on Thursday, as investors fretted over persistent inflation and aggressive central bank actions, while downbeat earnings from chip equipment firm BE Semiconductor and telecom company Nokia (NYSE:) fuelled fears of an economic slowdown.

Nokia fell 4.1% after the Finnish telecom equipment maker’s quarterly operating profit missed analysts’ expectations. Its rival, Ericsson (BS:), also posted weaker-than-expected earnings.

BE Semiconductor fell 2.8% after it forecast a fall in fourth-quarter revenue, warning that U.S. export curbs to China added more uncertainty to the industry outlook.

The downbeat outlook sparked a selloff in the chip sector, with ASM International (OTC:), ASML Holding (NASDAQ:) and Aixtron falling between 0.8% and 2%.

The region-wide index dropped 0.4%, extending declines to the second straight day, as a string of worrying inflation data fanned fears that central banks would need to stay aggressive and sapped the optimism after recent earnings reports.

Further pressuring stocks, Germany’s 10-year government bond yield rose to 2.43%, hitting its highest since August 2011.

However, in a bright spot, Finnish banking group Nordea beat profit estimates and Birkin bag maker Hermes saw sharp rise in sales growth with no signs of a slowdown. Nordea reversed early gains and was down marginally, while Hermes rose 4.0%.

Among other stocks, Swedish Match AB rose 2% after Philip Morris International (NYSE:) raised its buyout offer for the nicotine products maker.

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