By Nikhil Sharma
(Reuters) -European shares dipped on Wednesday, after a four-day rally following the U.S.-UK and U.S.-China trade deals, while corporate earnings from the region were also in focus.
The continent-wide STOXX 600 index was down 0.2% as of 08:23 a.m. GMT and was on pace to snap a four-day rally during which it rose 2.2%.
The gains started on Thursday after U.S. President Donald Trump announced a trade deal with Britain, and continued in the past two sessions after Beijing and Washington agreed to a 90-day pause on most of the tariffs imposed on each other in April.
“Trade headlines continue to move the dial. We’ve had a very strong recovery and good news as far as the U.S.-China trade truce is concerned,” said Fiona Cincotta, senior market analyst at City Index.
“We are just seeing a pause for breath as investors await the next catalyst.”
The STOXX 600 is well above the level in early April, when Trump unleashed his universal levies on trading partners, leading to a global sell-off. However, the handful of trade deals since then have sparked optimism.
Goldman Sachs raised its 12-month forecast for the STOXX 600 to 570 points, from 520, following the U.S.-China trade deal.
On the day, European technology stocks fell 0.7%, while the personal and household goods index dropped 0.9%, weighing heavily on the main index.
Among individual stocks, the laggards included Imperial Brands, which dropped 5.8% after the cigarette maker said CEO Stefan Bomhard will retire.
TUI, Europe’s largest travel operator, slid 10% after flagging a 1% drop in summer bookings.
German chemicals distributor Brenntag fell 4% after it reported a lower-than-expected quarterly core profit.
Swiss-American eye care group Alcon dropped 7.2% after it revised its 2025 outlook to reflect the impact of U.S. tariffs, while it missed expectations for first-quarter results.
Nonetheless, based on corporate results released so far, analysts estimate European companies will post a 1.9% increase in profit, better than the 0.4% rise they predicted a week ago, according to LSEG I/B/E/S data released on Tuesday.
On the positive side, Burberry jumped 9%, the most on the STOXX 600, after the luxury brand topped expectations for full-year profit and said it would cut 1,700 jobs.
FLSmidth also gained about 9% after it surpassed first-quarter profit estimates and said it was negotiating with Pacific Avenue Capital Partners to divest its cement business.
(Reporting by Nikhil Sharma; Editing by Janane Venkatraman and Savio D’Souza)
