Europe Shares Fall; Bleak Corporate Outlook Weighs

The FTSEurofirst 300 index of top European shares provisionally closed 0.8 percent lower at 762.66 points.

European shares fell for a fourth straight session on Thursday on investors' jitters over a gloomy earnings picture painted by top cellphone maker Nokia and software giant Microsoft.

The FTSEurofirst 300 index of top European shares provisionally closed 0.8 percent lower at 762.66 points after rising as high as 786.35. The index has fallen 8 percent so far this year on the top of a 45 percent plunge in 2008.

Nokia slumped 9 percent after a worse-than-expected dive in its fourth-quarter profit and its warning that market volumes would shrink 10 percent this year as the economic slowdown hit consumer spending.

The world's top software maker Microsoft shocked investors with disappointing results and said it would slash up to 5,000 jobs and stop offering profit forecasts for the rest of the year.

"On the one hand, you have very strong stimulus packages from governments and on the other hand, you have an extremely weak economy and a horrible fourth quarter," said Philippe Gijsels, senior strategist at Fortis Bank.

"These two are doing a battle at the moment, but I still think that we have a second chance of a bear market rally by the end of February or early March and then we get back down again because it's still a bear market," he added.

British telecoms provider BT Group fell 9.1 percent after it said it would take charges of 340 million pounds at its Global Services unit for the quarter to end-December that would outweigh better-than-expected results at the rest of the group.

Other technology shares were also lower, with Alcatel-Lucent , ASML Holding and STMicroelectronics slipping 3-4.3 percent.

But banks advanced after recent heavy losses. KBC surged 50 percent after the Belgian banking and insurance group secured a 2 billion euro ($2.58 billion) cash injection from the Flemish government. The stock had lost some 63 percent in the previous four sessions.

Commerzbank added 1.9 percent, Lloyds Banking Group jumped 8.9 percent and UBS rose 5.3 percent.

Around Europe, Britain's FTSE 100 index was down 0.2 percent, Germany's DAX index fell 1 percent and France's CAC 40 slipped 1.2 percent.