European shares slip as earnings, hawkish Fed weigh Reuters via

© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 31, 2024. REUTERS/Staff

(Reuters) – European shares kicked off February on a dour note on Thursday, as investors digested a raft of dismal earnings updates, while the U.S. Federal Reserve signalling that an early interest rate cut was unlikely also weighed on sentiment.

The pan-European index fell 0.2% as of 0820 GMT.

Banks dragged the most, down 1.4%, led by a 7.7% drop in BNP Paribas (OTC:) after the French bank missed quarterly earnings expectations, leading it to push back its 2025 profit target.

BNP also pulled 40 index 0.6% lower.

Sabadell added to the sector’s losses, down 3.4%, as the Spanish bank issued a cautious outlook for net interest income growth in 2024 after lending revenue fell in the fourth quarter.

Adidas (OTC:) was also among decliners, down 7.7% as the German sportswear maker’s 2024 outlook missed estimates.

Adding to the subdued sentiment, market expectations of an early interest rate cut was squashed overnight as the Fed left rates unchanged but was less dovish than anticipated, with Wall Street ending sharply lower on Wednesday. [.N]

Markets will now await a slew of economic data during the day, including the euro-zone unemployment data for December and the consumer price index (CPI) inflation data for January.