By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets dropped from
multiyear highs on Wednesday after the World Bank cut its global
growth forecast, while Deutsche Lufthansa AG and Vallourec SA both
slumped more than 10% after profit warnings.
The Stoxx Europe 600 index gave up 0.3% to 348.60, after closing
at the highest level since January 2008 on Tuesday.
Weighing on the benchmark, shares of Deutsche Lufthansa slid 12%
after the airline cut its operating profit forecast for 2014 and
said it no longer expects to achieve its 2015 operating result
target. If the stock closes down at this level, it will mark the
worst trading day since September 2001 for Lufthansa.
Vallourec tumbled 12% on news the steel-pipe maker late Tuesday
cut its full-year guidance for 2014 after large clients delayed
orders until next year. Credit Suisse and Exane BNP Paribas both
cut the company to neutral from outperform, while J.P. Morgan
Cazenove downgraded the stock to underweight from neutral.
Aside from corporate news, investors digested the recent rally
in equities that was spurred by the European Central Bank's
aggressive stimulus measures announced last week. The Stoxx 600 was
at a more than six-year high on Tuesday, Germany's DAX index close
to a record high and the S&P 500 (SPX) and Dow Jones Industrial
Average (DJI) hovering around all-time highs, and there is now
concern that the "positive momentum is beginning to flag," Mike van
Dulken, head of research at Accendo Markets, said in a note.
"That's not to say we necessarily expect a correction, but at
least a sideways move as a pause for breath following recent
gains," he said.
The World Bank also gave investors food for thought, trimming
its global growth forecast for 2014 to 2.8%, down from its 3.2%
forecast in January. The institution said the harsh winter in the
U.S. and the Ukraine conflict have bruised the outlook for economic
growth globally this year.
In its report, the World Bank also warned of a "hard landing" in
China that could weigh down East Asian countries and hurt commodity
exporters.
Among country-specific indexes in Europe, the U.K.'s FTSE 100
index fell 0.3% to 6,852.70.
Germany's DAX 30 index dropped 0.5% to 9,984.28, while France's
CAC 40 index lost 0.5% to 4,561.87.
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