London - European shares slipped to a three-week low on Tuesday, with Commerzbank leading decliners after a slump in profits and miners tracking lower metals prices following weak factory data from China.
Germany's Commerzbank fell 6.8 percent, the top decliner in the pan-European FTSEurofirst 300 index, after posting a 52 percent drop in first-quarter net profit, hit by volatile capital markets and low interest rates.
Europe's biggest bank HSBC, which initially gained after reported a smaller than expected fall in its first-quarter profit, then dropped in line with a broader sell-off.
The STOXX Europe banking index fell 1.8 percent, while the Basic Resources index was down 3.7 percent after prices of major industrial metals fell following data on Tuesday showing activity in China's factories shrank for the 14th straight month in April.
“I would be cautious on the mining sector because if global growth disappoints again, then commodities could also certainly be prone to disappointments,” Gerhard Schwarz, head of equity strategy at Baader Bank in Munich, said.
“The dollar is going softer and there are some concerns that the currency is no longer a tailwind for some companies. The results season is not bad overall so far, but I would doubt that the earnings outlook will really improve that significantly as expected. The impact from pricing power is still rather weak.”
German chipmaker Infineon fell 2.5 percent after lowering its revenue and profit margin guidance for the full year saying it expected to benefit less from exchange rates.
According to StarMine data, 44 percent of European firms have announced results so far, of which 61 percent have met or beaten forecasts. But first quarter earnings are set to fall 18 percent from the corresponding period of 2015.
The pan-European FTSEurofirst 300 index was down 1.3 percent at 1,324.76 points by 08h43 GMT after falling to 1,323.83, its lowest level since mid-April.
Solvay rose 2.8 percent, the top gainer, after reporting better-than-expected first-quarter results, as cost cuts offset the slightly lower prices offered by the group to its customers.
French bank BNP Paribas was up 2 percent after saying net income rose 10.1 percent in the first quarter as lower provisions for bad loans helped offset a slump in its corporate and institutional business.
REUTERS