* FTSEurofirst 300 down 0.3 percent
* BBVA, Airbus lower after disappointing results
* But Deutsche Bank rises on surprise profit (ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)
By Danilo Masoni and Alistair Smout
MILAN/LONDON, April 28 (Reuters) - European shares fell on Thursday after the Bank of Japan unexpectedly held off from expanding monetary stimulus, while Spanish bank BBVA and Airbus fell on disappointing earnings updates.
BBVA was the worst-performing stock on the pan-European FTSEurofirst 300, dropping 7.2 percent after it missed estimates with a 54-percent fall in first quarter net profit.
“European markets are lower today first of all (because) there are probably more earnings disappointments than beats and beats are based on dramatically lowered expectations,” Will Hamlyn, investment analyst at Manulife Asset Management, said.
The sharp fall in the Nikkei that followed the BOJ decision was weighing on sentiment, and there was some profit taking as markets traded well above February lows, Hamlyn added.
The FTSEurofirst 300 index, which hit a three-month high last week, was down 0.3 percent by 1402 GMT, rising off its lows after the Wall Street open.
European stocks tracked a pullback on the Nikkei and other major stock markets after the BOJ’s move offset earlier momentum triggered by the U.S. Federal Reserve staying tight-lipped on whether it would raise interest rates in June.
Airbus fell 5.6 percent after it reported a heavier-than-expected seasonal outflow of cash and warned of serious challenges for its A400M military plane, even as profits came in slightly ahead of expectations.
“Cashflow was weak in the quarter, reflecting the 2016 delivery profile... The scale of the free cash outflow in 1Q could cause some concern, but we’d say that this fits with the usual seasonal pattern,” analysts at RBC said in a note, rating the stock at “sector perform”.
In the UK, Royal Bank of Scotland droped 4.2 percent in afternoon trade after it said it was likely to miss an end-2017 deadline to sell its William & Glyn brand, saying the financial impact on the bank would be significantly greater than previous estimates.
Sector peer Lloyds fell 1.6 percent after it reported underlying profits in line with expectations, keeping first quarter revenues steady and cutting bad debts despite the challenging economic environment.
Among the top performers in the banking sector, Deutsche Bank rose 3.7 percent after it posted a surprise net profit in the first quarter, helped by lower litigation costs.
ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.
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Mike Dolan, Markets Editor EMEA.
Editing by Andrew Heavens