European shares slip as weak earnings offset Fed promise

(Reuters) – European shares opened lower on Thursday as a clutch of dismal earnings reports took the shine off the U.S. Federal Reserve’s vow to keep stimulus taps open to shore up a coronavirus-ravaged economy.

The pan-European STOXX 600 <.STOXX> fell 0.4% by 0713 GMT, dragged by 1.5% declines in banking stocks <.SX7P> and carmakers <.SXAP>.

Britain’s Lloyds Banking Group swung to a rare pretax loss in the first half of 2020, while Volkswagen unveiled a first-half operating loss and slashed its dividend.

Anheuser-Busch InBev jumped 9.4%, providing the biggest boost to the STOXX 600 after saying it was encouraged by a global beer sales recovery in June.

Weak oil prices weighed on the energy sector <.SXEP> even as Royal Dutch Shell avoided its first quarterly loss in recent history after bumper earnings in its trading business, while France’s Total said it would maintain its dividend.

Asian stock markets and Wall Street overnight gained as Fed Chairman Jerome Powell promised to “do what we can, and for as long as it takes,” to limit economic damage from the pandemic and boost growth.

Investors are eyeing a slew of economic data, including German second-quarter GDP data, euro zone June unemployment numbers and final consumer confidence data.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty)