European shares fell on Wednesday, with Austrian brickmaker Wienerberger, brewer Carlsberg and UK insurer Admiral sliding after publishing results. The pan-European STOXX 600 index, which reached a seven-week high earlier in the week, fell 0.8 percent. The STOXX 600 is down around 7 percent so far in 2016. Wienerberger was among the worst-performing stocks in Europe, falling 6.2 percent after warning of negative currency impacts from the weakening of sterling following Britain's vote in June to leave the European Union.
Admiral dropped 7.7 percent, down from recent record highs, after saying its solvency ratio had been hit by the shock Brexit referendum. Carlsberg fell 5.2 percent after reporting half-year results slightly below expectations, although it said it would maintain its 2016 outlook as its cost-cutting strategy shows progress. On the upside, construction company Balfour Beatty rose 3 percent after resuming its dividend.
The STOXX 600 slumped in the immediate aftermath of the Brexit vote, but has since recovered much of that ground, helped by an interest rate cut in Britain and expectations of more monetary stimulus from the European Central Bank. Nevertheless, some investors were wary of European stocks. "There's still a lot of uncertainty out there. No one wants to take the big positions needed to push the European market higher," said Andreas Clenow, chief investment officer at ACIES Asset Management.
Clenow said he preferred US to European stocks. US earnings have been better than those in Europe, according to Thomson Reuters StarMine data, and have pushed US stock markets to record highs. European indices, meanwhile, are weighed down by banking stocks, which are nearly 30 percent lower this year due to concerns about the financial position of some leading lenders. "European bank stocks need to pick up for the rest of the European market to push on higher again," said Clairinvest fund manager Ion-Marc Valahu.