LONDON: European stocks sank on Thursday as investors digested a barrage of results, with Frankfurt sliding after German sportswear giant Adidas issued a gloomy profits warning linked to the crisis in Ukraine.
Investor sentiment remained cautious on the eve of the crucial US non-farm payrolls data, which is a major indicator of the health of the world's biggest economy.
In early afternoon deals, London's benchmark FTSE 100 index fell 0.18 percent to stand at 6,760.88 points, the Paris CAC 40 lost 0.75 percent to 4,280.92 points and Frankfurt's DAX 30 index shed 0.91 percent to 9,506.42.
Lisbon stocks fell 3.0 percent, driven by a 45-percent slump in shares of stricken Portuguese bank Banco Espirito Santo (BES), which posted a record first-half loss of 3.57 billion euros late on Wednesday.
The European single currency meanwhile eased to $1.3390 from $1.3395 late in New York on Wednesday.
Europe's main equity indices had already fallen Wednesday on concerns that tougher sanctions against Russia could hurt the region's economy despite news of a sharp rebound in US economic growth.
Investor sentiment Germany -- a key exporter of goods to Russia -- has taken a blow.
Adidas shares plunged 12.92 percent to 61.13 euros, topping the DAX fallers board on Thursday, after warning that the Ukraine crisis and Western tensions with Russia, one of its key markets, would weigh on its business.
Adidas also slashed its annual net profit forecast to about 650 million euros ($870 million). That was much lower than previous guidance for between 830-930 million euros.
"German stocks were the worst hit... which is hardly surprising given the amount of trade the country conducts with Russia," said analyst Craig Erlam at traders Alpari.
"When you see profit warnings like these from such a large company, it really makes you realise exactly what these countries are losing every time a fresh batch of sanctions are imposed on Russia."
He added that the Adidas announcement "not only confirmed what people had already feared -- but highlighted the fact that the pain felt in Europe could be much larger than anticipated" from the Ukraine crisis.
In London, Britain's state-rescued Lloyds Banking Group saw its share price slide 2.74 percent to 74.32 pence after posting a 57-percent drop in first-half net profits.
Earnings after taxation dived to £665 million ($1.125 billion, 840 million euros) in the six months to June, hit by compensation for insurance mis-selling and fines over Libor rate rigging.
London's top gainer was energy major Royal Dutch Shell, whose 'B' share price rallied 3.76 percent to 2,582.57 pence after revealing that net profits more than tripled in the second quarter, boosted by asset sales and higher oil prices.
Earnings after taxation soared by 206 percent to $5.307 billion (3.961 billion euros) in the three months to June compared the same part of 2013.
Asian markets traded mixed after US data showing the world's top economy grew much more than expected in the second quarter was offset by late profit-taking.
Tokyo stocks declined 0.16 percent and Seoul lost 0.31 percent, while Sydney added 0.18 percent, Shanghai jumped 0.93 percent and Hong Kong gained 0.10 percent.
Official data showed that the US economy grew 4.0 percent in April-June, much more than the 3.0 percent forecast.
It was also a sharp reversal on the 2.1 percent contraction in the previous three months that was caused by a severe winter.
Despite the upbeat data, Wall Street finished mixed after the US Federal Reserve kept interest rates near zero and cut its monthly bond purchases by $10 billion as expected, taking the program to $25 billion a month.
The Fed acknowledged that the economy shows "sufficient underlying strength" to support recent gains in job creation and cutting unemployment, but it also suggested continued disappointment with the state of the jobs market.
In foreign exchange trading, the euro rose to 79.35 British pence from 79.18 on Wednesday. The pound fell to $1.6874 from $1.6916.
The price of gold firmed to $1,294.88 an ounce on the London Bullion Market from $1,294.50.
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