London - European shares were little changed on Tuesday as a gloomy outlook statement from Software AG was partly offset by strong earnings reports from Scandinavian companies such as H&M.
Shares in Software AG fell 14 percent after the company said it now expects 2014 revenues to be stagnant compared with a year earlier, a warning signal for the software industry before the second-quarter reporting season.
While Software AG's direct competitors, such as Informatica Corp and Tibco Software, are mostly listed in the United States, but Tuesday's announcement was felt on the STOXX Europe 600 Tech index.
The index fell 0.6 percent, making it the worst-performing sector.
“It's not a good sign that some clients are postponing signing (contracts),” an analyst said.
The pan-European FTSEurofirst 300 index was flat at 1,363.66 points at 09:45 SA time.
The Euro STOXX 50 fell 0.3 percent at 3,176.57 points.
The Euro STOXX 50 rose 0.9 percent on Monday, recouping part of its 3.5 percent drop last week, which came after some soft economic data and concern about Portugal's banking system.
Norway's benchmark index outperformed on Tuesday, rising 0.5 percent after stronger-than-expected numbers from insurer Gjensidige.
Stockholm's OMXS steadied, helped by a rise in Swedish budget fashion firm Hennes & Mauritz after a strong sales update.
CHARTS SHOW CAUTION
Some late selling over the past two sessions suggested investors remained cautious and were happy to book any intra-day profit.
“It means the resumption of the uptrend is not going to be a V-bottom but is going to take a bit of time,” said Philippe Delabarre, an analyst at Trading Central.
“Most of the correction move is done and the bullish trend should resume thanks to an intermediary support at 3,135 (which supported the index between April 25 and May 19) and an ascending trend line drawn from December 2013.”
Traders were awaiting German sentiment and British inflation data to assess the state of Europe's largest economy and the outlook for UK interest rates.
Federal Reserve Chair Janet Yellen testifies on the central bank's monetary policy before the Senate Banking Committee at 16:00 SA time.
Analysts at Societe Generale expect Yellen to maintain her recent, dovish tone despite improvements in labour market conditions and housing activity. - Reuters