European shares pulled back from 7-week highs on Tuesday, weighed down by industrial stocks, after Swiss firm Schindler lowered its outlook for 2016. The STOXX Europe 600 fell 0.8 percent. While it closed flat on Monday, it had touched its highest level since Britain voted in June to leave the European Union.
Schindler Holding AG fell 4.3 percent, the biggest faller on the index after it cut the top end of its revenue growth outlook for the year as increasing uncertainty in the Chinese construction market and the recession in Brazil continues to hurt the Swiss elevator manufacturer. Industrial firm Rotork fell 2.1 percent, the top STOXX 600 faller, after HSBC cut the valve-control systems maker to "reduce" from "hold".
K&S fell to a three year low, with the potash firm down 12 percent since results were announced last week. It dropped after UBS cut its target price on the stock and reiterated its "sell" rating, saying that potash prices were likely to stay under pressure. "We continue to see an oversupplied potash market... Closures are happening but the demand side of the equation does not look too favourable," analysts said in a note.
At the other end of the STOXX 600, Switzerland's Geberit rose 4.6 percent to a record high after it beat expectations with its second quarter results and struck a confident tone for its outlook. Linde was the top STOXX 600 riser, up 5.9 percent, after a source said US industrial gas supplier Praxair Inc is in early-stage talks to acquire its German peer and create a market leader with a value of more than $60 billion.
The rise in Linde helped the STOXX 600 Chemicals index into positive territory. The only other sector in positive territory was the Basic Resources sector, as results boosted miners. BHP Billiton turned higher and traded up 1.2 percent after early weakness. Despite posting a record loss, underlying profit beat expectations and the miner said it saw good growth in 2017.
London-listed Chilean miner Antofagasta also rose after reporting a rise in first half profit. "Continued ramp-up of the Antucoya project which came on-line last quarter is helping along with a prudent attitude to capital management in light of the new commodity environment and still uncertain economic outlook," Mike van Dulken, head of research at Accendo Markets, said. "Management's view of an end to market oversupply by 2018 is also the right kind of sound to be making in order to entice bulls into a recovery story."
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