* Pan-European falls 0.3 pct, down 7 pct year-to-date
* Roche lower after results miss expectations
* Oil stocks higher as crude steadies above $33 (Adds quotes, detail, recasts)
By Alistair Smout and Danilo Masoni
LONDON/MILAN, Jan 28 (Reuters) - European shares fell on Thursday as disappointing earnings from Roche weighed on the healthcare sector and euro zone banks also came under pressure.
By 1200 GMT, the pan-European FTSEurofirst 300 index was 1.3 percent lower at 1,323.96 points, while the euro zone’s blue chip Eurostoxx 50 index also fell, down 1.5 percent.
Roche dropped 4 percent after 2015 net profit from Swiss drug maker fell short of expectations in 2015 and the company’s forecast of an improvement this year met a sceptical market response. Its dividend also disappointed.
Analysts at Deutsche Bank said Roche had been weighed down by its diagnostics business, high tax and foreign exchange effects. It however reiterated its buy rating on the stock saying underlying results were of good quality.
“There are big FX headwinds from last year which are filtering through now... and that’s going to be the trend for Swiss drugmakers and for Swiss stocks more generally,” said Joe Rundle, head of trading at ETX Capital.
Fellow pharmaceutical firm Novartis fell 3.3 percent after many target price cuts from brokers following its own disappointing results on Wednesday.
Euro zone banks were down 3.5 percent, with several Italian lenders being suspended “limit down” for the second time in as many days.
An EU scheme to help Italy’s banks offload billions of euros of bad loans has been greeted with falls in the sector since Wednesday. The deal is a complex compromise, and could see the banks take significant losses on the debt.
“Europe is seven years behind the curve when it comes to sorting out the bad bank issues, which is why Europe hasn’t recovered,” ETX Capital’s Rundle said.
“There’s a realisation that while the issues are being dealt with, there are a range of further measures that will need to be taken.”
Fashion firm H&M fell 4.2 percent after the fashion firm warned that price reductions to help shift large stocks of winter wear after unusually warm weather and a strong dollar would weigh on its first quarter.
Among the gainers, Electrolux added 3.9 percent, despite reporting a fourth quarter loss, with traders citing a better than expected underlying performance.
Investors were also digesting the latest update from the U.S. Federal Reserve, which kept rates unchanged on Wednesday saying it was “closely monitoring” global economic and financial developments, signaling it wasn’t ready to abandon a plan to tighten monetary policy this year.
“The Fed was very pragmatic by showing it is ready to evaluate the impact of markets and delaying any decision to March,” said Marco Vailati, head of research at Cassa Lombarda.
Today’s European research round-up RCH/EUROPE (Editing by Raissa Kasolowsky)