European shares halt; Diageo dips

Paris - European stocks slipped in early trading on Thursday, halting their recent sharp rally, with shares in Diageo dropping after it posted a fall in sales.

Diageo, the world's largest spirits maker, was down 2.6% after saying net sales in the three months to March 31, the third quarter of its financial year, fell 0.7%.

Shares in Casino fell 3.1% after the French retailer said growth slowed in the first quarter, reflecting a still lacklustre performance in France despite price cuts there.

Ipsen sank 9.7% after the French pharmaceutical firm said it was discontinuing the development of its prostate cancer drug Tasquinimod.

Bucking the trend, SABMiller [JSE:SAB] gained 2% after reporting a marginal rise in full-year beverage sales volumes, while Unilever reported better-than-expected sales for the first quarter, showing improvement from the hammering it took last year from weak emerging markets including a slowdown in China.

Airbus Group rose 2.1% after the aircraft maker said it will ask shareholders to approve an exceptional share buyback of up to 10% of its capital at its annual meeting on May 27.

Automakers gained ground, boosted by data showing Europe's auto market recovery gained a firmer footing in March, with Germany, Britain, France, Italy and Spain all posting solid gains.

PSA Peugeot Citroen rose 1.3%, Renault added 1.2% and autoparts maker Valeo gained 1.9%.

At 09:42, the FTSEurofirst 300 index of top European shares was down 0.2% at 1 646.42 points.

The benchmark index gained 0.6% on Wednesday to reach levels not seen since 2000, after the European Central Bank (ECB) said it remained committed to its full asset-buying programme to revive the eurozone economy.

"We were quite happy with (ECB President) Mario Draghi's press conference. He didn't announce anything new, but he gave answers to two big questions: there won't be a shortage of bonds to buy, and he quashed worries that the central cank could scale down QE sooner than planned," Mirabaud Securities' senior equity sales trader John Plassard said.

Around Europe, UK's FTSE 100 index was down 0.2%, Germany's DAX index down 0.8%, and France's CAC 40 down 0.4%.