August 3, 2017 / 7:29 AM / a year ago

Cyclicals send European shares south again while Next shines

LONDON, Aug 3 (Reuters) - European shares fell back on Thursday as energy and banking stocks dragged broader indices, while retail was a bright spot after an upbeat set of results from Britain’s Next.

The pan-European STOXX 600 slid 0.2 percent as cyclical sectors weighed, while euro zone blue chips fell 0.3 percent.

Britain’s FTSE 100 slipped 0.1 percent as investors awaited the Bank of England’s monetary policy decision.

Energy stocks fell 0.7 percent, weighed by refiner Neste which dropped 5.5 percent after second quarter profit missed expectations.

The oil and gas sector is the worst performers in Europe this year and the only one trading in the red.

Retailer Next jumped 9 percent, the best performer on the STOXX 600, after the firm returned to sales growth in the second quarter, boosted by an improvement in product ranges and a better online offer.

Next’s shares had been dented this year by two cuts to profit guidance, putting it among the worst-performing on the STOXX 600 retail index, down 18 percent year-to-date.

While banks overall fell on the day, shares in Italy’s largest bank Unicredit bucked the trend, climbing 4.4 percent after reporting forecast-beating profits for the second quarter.

Unicredit helped Italy’s blue-chips outperform, up 0.2 percent.

Credit Agricole shares fell 1.4 percent to the bottom of France’s CAC 40, despite the bank’s profits beating estimates.

Some traders cited concerns over one-off items flattering the earnings numbers.

Of the 56 percent of MSCI Europe companies having reported earnings for the quarter, 62 percent have either beaten or met estimates.

Basic materials, energy and financials were leading the sector table in terms of forecast-beating results, while utilities and industrials have seen the most forecast misses.

Reporting by Helen Reid, Editing by Vikram Subhedar

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