European shares ended a choppy session in negative territory on Tuesday as investors punished companies like Zalando that missed expectations and remained cautious while waiting for the results of US mid-term elections. The pan-European STOXX 600 and the euro zone's leading index both dipped 0.3 percent.
"Global stocks are in wait and see mode today, with losses in Europe followed by a largely flat open in the US", IG analyst Josh Mahony wrote, adding that US president Donald Trump's tax and trade policies would come into question if the Democrats won Congress.
Zalando shares tumbled 8.5 percent after Europe's biggest online-only fashion retailer reported its slowest rate of sales growth since it was launched a decade ago, and recorded a loss due in part to unseasonably warm weather.
"The shift to mobile, fast fashion and beauty is driving down basket size, competition is putting pressure on gross margin, and Zalando's build out of distribution centres across Europe whilst transport costs are increasing has put upward pressure on the fulfilment cost ratio," wrote Berenberg analysts.
Shares in Austrian engineering group Andritz fell 4.3 percent after it missed third-quarter operating profit forecasts due to higher costs at its metals unit and lower earnings at its hydro operations.
Many companies this earnings season have flagged a squeeze on margins from rising commodity and wage costs amid signs of a growth slowdown in Europe.
Euro zone business growth slumped to a two-year low in October as growing trade tensions and tariffs, alongside rising political uncertainty, put a dent in exports and optimism.
Overall earnings expectations are holding firm despite weaker economic data.
"We think there's a lot of potential that might be unlocked on the European side but unfortunately there are some idiosyncratic stories that have slowed down the potential for European equities," said Monica Defend, chief strategist and deputy head of group research at Amundi.
Staffing firm Adecco rose 3 percent after its results met expectations and margins were stronger, with analysts saying the shares had been pricing in much of the euro area's slowing economy.
Spanish wind turbine maker Siemens Gamesa surged 14 percent after reporting strong order intake.
Danish peer Vestas Wind also climbed 6.1 percent.
Morphosys shares jumped 8 percent after it forecast revenues at the upper end of its guided range.
Postal and logistics firm Deutsche Post gained 3.4 percent after its profit decline was less steep than analysts had expected.
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