European shares, knocked off multi-month highs on US growth concerns, will look for direction from this week's barrage of earnings, particularly from energy, pharmaceutical and tech companies. BP reports on Tuesday and Royal Dutch/Shell on Thursday - the same day as world number one Exxon Mobil. Bumper oil prices are boosting the sector's earnings growth but analysts expect growth to taper later this year.
Among the drugmakers, Germany's Schering updates the market on Monday, while GlaxoSmithkline and AstraZeneca report results on Thursday along with Germany's Altana.
"In Glaxo and Astra, the market will look for signs that cost cutting can start to produce some positive earnings suprises," said Canada Life fund manager Mark Bon.
The US Food and Drug Administration last month siezed supplies of antidepressant Paxil CR and diabetes medicine Avandamet made at GlaxoSmithkline's Cidra plant in Puerto Rico and analysts shaved sales estimates of the two key drugs.
"The concern will be 'Is this just the tip of the iceberg?', 'Are there other issues in other Glaxo plants that can be a problem or are these issues really just specific to this plant?'," said UBS analyst Rachna Upadhya.
"For Astra, the key issues would be some clarity on margins and an update on the late stage pipeline, especially Cerovive which is due to report in the second quarter," she said. Tech earnings include Europe's top chipmaker Infineon and the second-biggest, STMicroelectronics, on Tuesday. Siemens is due to report on Wednesday. The numbers come after Intel's forecast-beating results allayed fears of a sector slowdown.
Investors will also be scouring results from Microsoft, due out on Thursday.
The sector got a boost this week when mobile phone group Nokia soundly beat first-quarter profit estimates, followed by similarly bullish news from Ericsson.
In a thin week for macroeconomic data, Germany's Ifo institute issues an update on its closely watched gauge of business sentiment on Monday. Expectations are low after the ZEW institute's index of investor confidence tumbled in April to its weakest level since December.
"The wider perception is that a slowdown is the main risk," said Canada Life's Bon. "In the short term, it is better to stay defensive but also look out for opportunities in stocks that have been hit hard by negative sentiment."
By 1100 GMT, the FTSEurofirst 300 pan-European blue chip index had pared most of its losses struck early in the week and looked set to end just 1 percent lower, but still off multi-month highs. The index is up 3 percent so far this year.
"We are in for a few weeks of heightened volatility. The oil price is having a bearing on the global economy and the momentum is going to slow," said Michael Turner, head of global strategy at Edinburgh Fund Managers.
Nestle, which is battling a rise in raw material prices, reports sales on Monday. Among the financials, Spain's Bankinter reports on Monday, earnings are due from ABN Amro on Wednesday and Deutsche Bank and Italian insurer RAS on Friday. Barclays issues a trading update on Thursday.
Results are due from truck maker Volvo on Monday and on Friday, Europe's largest carmaker Volkswagen, which has said the first quarter will be the worst this year, reports results. German chemicals giant BASF reports on Thursday.
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