LONDON (Reuters) - European equities fell on Thursday after seven straight sessions of gains, with weaker metal prices weighing on miners and a poor update battering shares in engineering group Cobham (>> Cobham plc).
Companies like NN Group (>> NN Group) and Drax (>> Drax Group Plc) also dragged the market lower after their disappointing updates.
The pan-European STOXX 600 <.STOXX> fell 0.4 percent after recent gains to a two-month high on Wednesday.
Cobham led the STOXX 600 lower after slumping 15.3 to its lowest level since August 2005.
The sharp sell-off came after the company missed a profit target that had already been repeatedly lowered and took a charge on a troubled contract with Boeing, capping "an incredibly turbulent and disappointing year" for the defence and aerospace group.
The company said 2017 could be even worse as it struggles to fix operational problems in difficult markets. Its shares have already more than halved in the last 12 months.
"Investors are ditching the stock as it looks like the problems at Cobham go further than anyone realised when all this started. There is every reason to think that management’s review of the business may throw up further concerns and more write-downs," said Neil Wilson, an analyst at ETX Capital.
Miners put pressure on the broader market. The STOXX Europe 600 Basic Resources index <.SXPP> fell 0.9 percent, the biggest sectoral decliner, as copper prices fell after China's overseas investment weakened and sentiment waned over demand in the world's top copper user. [MET/L]
Shares in Anglo American (>> Anglo American plc), Antofagasta (>> Antofagasta plc) and Rio Tinto (>> Rio Tinto plc) fell 0.2 to 2 percent.
Elsewhere, Dutch insurance company NN Group (>> NN Group) dropped 7.6 percent after its fourth quarter core profit missed expectations, while power producer Drax (>> Drax Group Plc) fell 5.3 percent after saying it was reviewing its dividend policy.
However, broader market losses were partly offset by stronger airlines. Air France-KLM (>> Air France-KLM) jumped 12.6 percent after reporting better-than-expected operating profit for 2016 and said it had made a "resilient" start to 2017.
Shares in International Consolidates Airlines Group (>> International Consolidated Airlns Grp SA) and Lufthansa (>> Deutsche Lufthansa AG) rose 0.6 percent and 2.2 percent respectively.
Shares in German fashion house Hugo Boss (>> Hugo Boss AG) rose 6.6 percent, the biggest gainer in the STOXX 600, after a report that the holding company of Belgium's richest man, Albert Frere, has taken a stake of nearly 3 percent and wants to increase it further.
Mobile telecom equipment maker Ericsson (>> Telefonaktiebolaget LM Ericsson) advanced 4.4 percent on a media report saying that Cisco was open to larger acquisitions, while IT services group Capgemini (>> Cap Gemini) added 3 percent after saying that it was targeting higher 2017 earnings.
(Additional reporting by Danilo Masoni; Editing by Gareth Jones)
By Atul Prakash
Stocks treated in this article : Air France-KLM
, Cap Gemini
, Deutsche Lufthansa AG
, Antofagasta plc
, Cobham plc
, Drax Group Plc
, Anglo American plc
, Rio Tinto Limited
, Telefonaktiebolaget LM Ericsson
, International Consolidated Airlns Grp SA
, Rio Tinto plc
, Hugo Boss AG
, NN Group