European shares were lower at midday on Wednesday in a choppy session, with financials and miners the biggest fallers and a Bank of England inflation report knocking investor sentiment.
By 1056 GMT, the pan-European FTSEurofirst 300 index of top shares was down 0.8 percent at 845.95 points, having been up as much as 857.12 points earlier in the session.
"We can not expect things to keep going in the same direction. …. Results are still mixed with financials still not looking great," said David Buik, partner at BGC Partners.
Banks were the biggest losers on the index. Dutch banking and insurance group ING lost 5.3 percent after it reported a much bigger than expected first-quarter net loss, hurt by a sharply weaker insurance business. Royal Bank of Scotland dropped 7.6 percent as the part-nationalised bank's chief executive says it faces serious net interest margin headwinds.
UBS fell 6.7 percent after Swiss National Bank board member Thomas Jordan said he wanted UBS to be smaller in the future.
However, Belgian-French financial services group Dexia rose 4.7 percent and declared it was "on the mend" after first-quarter profit beat expectations due to keen cost control.
Insurer Allianz was down 3.6 percent after it eked out a small net profit in the first quarter, but operating results in its insurance businesses fell by around a third and it was hit by further writedowns on shares. Miners were also on the downside. Rio Tinto slipped 5.9 percent on growing speculation the global miner is set to launch a rights issue instead of selling $19.5 billion in stock and assets to China's Chinalco aluminium group.
COMPASS GAINS ON PROFIT RISE
Looking at economic news, the Bank of England released its quarterly Inflation Report in which it predicted the economy will shrink sharply in the coming months before recovering at a slower pace than previously thought. "It seems to me to inject a bit of caution amidst all the talk of green shoots of recovery," said Jonathan Loynes, Chief UK Economist at Capital Economics.
"They are still looking for a fairly decent recovery in the economy next year and beyond, but obviously stressing the uncertainty around that and warning that it could take some time for sustained growth to come through," he said.
Drugmakers were the highest gainers as investors stuck with the safety of defensive stocks.
AstraZeneca, GlaxoSmithKline, Novartis, Roche and Sanofi-Aventis were up 2-4.2 percent.
Energy stocks performed well as crude rose 1.5 percent. BG Group, Royal Dutch Shell, Tullow Oil and Total were 1.2-2.2 percent higher.
Compass, the world's biggest caterer, soared 8.6 percent after it reported a 40 percent rise in first-half profit, driven by new business wins and cost efficiencies, and said second-half trade had started well. Across Europe, the FTSE 100 index was down 0.4 percent, Germany's DAX was down 0.2 percent and France's CAC 40 was up 0.01 percent.
