Reuters    •   4 min read

European shares fall as investors digest earnings deluge; Adidas sinks

WHAT'S THE STORY?

By Twesha Dikshit

(Reuters) -European shares fell on Wednesday, weighed down by bank stocks, as corporate earnings took centre stage ahead of a packed week, which includes central bank announcements, key economic data and the August 1 tariff deadline. 

German sportswear brand Adidas warned that higher U.S. tariffs would add around 200 million euros ($231 million) to its costs in the second half, sending shares tumbling 5.4% to a near four-month low. Peer JD Sports fell 1.8%.

Banks index dipped 0.5% a day

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after hitting its highest since September 2008. Swiss bank UBS rose 1% after reporting its second-quarter profit more than doubled from last year's, while HSBC Holdings fell 3.4% on posting first-half pretax profit below estimates.

The pan-European STOXX 600 index eased 0.1% by 0830 GMT. Regional bourses were mixed, with Germany's blue-chip DAX dipping 0.1%, while France's CAC 40 rose 0.2%. 

The STOXX 600 has remained largely unchanged since the U.S.-European Union framework trade deal was announced over the weekend. The 15% U.S. tariff - set to take effect next month on most EU goods - is half the initially threatened rate, but still significantly higher than levels seen at the start of the year.

"The impact of tariffs can't be overlooked even though recent deals have provided greater clarity," said Mark Haefele, chief investment officer at UBS Global Wealth Management.

"A slew of data and earnings results could revive market volatility in the coming days."

Attention will shift to the euro zone and U.S. GDP data later in the day, followed by the Federal Reserve's policy decision, where it is widely expected to keep its benchmark interest rate unchanged, resisting pressure from President Donald Trump to lower borrowing costs.

On the day, chemical stocks were laggards, falling 1%. Dutch speciality chemicals maker IMCD was among the top decliners on the index after quarterly results. The firm slumped 9.7% to a more than four-year low.

Among individual stocks, British luxury carmaker Aston Martin fell 2.4% after lowering its annual profit outlook. Germany's Mercedes-Benzeased after the carmaker estimated a nearly $420 million tariff impact.

Defense company BAE Systems fell 1% despite upgrading its annual earnings forecast.

The outlook for European corporate health has improved, earnings forecasts showed on Tuesday, after the EU struck the trade deal with the United States.

(Reporting by Twesha Dikshit and Medha Singh, editing by Eileen Soreng)

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