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European equities drop amid barrage of company results

European stock markets fell Thursday as dealers fretted over the shrinking US economy and a flood of company earnings news, with Madrid hit hard by poor results from eurozone banking giant Santander.

London's FTSE 100 index of leading companies closed down 0.73 percent to 6,276.88 points as investors also digested earnings from a host of British companies including energy major Royal Dutch Shell and brewer Diageo.

Frankfurt's DAX 30 gave up 0.45 percent to 7,776.05 points, and in Paris the CAC 40 fell 0.87 percent to 3,732.60 points.

"The US GDP numbers yesterday have sent some jitters across the markets," said analyst Anita Paluch at trading firm Gekko Global Markets.

Investors were surprised by the US Commerce Department figures showing the world's biggest economy shrank at an annual rate of 0.1 percent in the October-December quarter. Forecasts had been for a 1.0 percent rise.

The euro rose to $1.3582 compared with $1.3564 in New York late on Wednesday, when it had struck a 14-month peak at $1.3587.

"Heavyweight stocks are weighing today, as a busy day for corporate results has leaned in favour of the bears," said IG analyst Will Hedden, in reference to investors who believe that markets are heading lower.

Madrid's IBEX 35 index slumped 2.45 percent to 8,362 points after Santander announced plunging 2012 net profits and wrote off nearly 19 billion euros ($26 billion) for dodgy loans and for property assets in Spain.

Profits after taxation tumbled 59 percent to 2.2 billion euros in 2012, compared with the previous year.

In reaction, the Spanish lender's share price dived 3.45 percent to 6.18 euros in Madrid.

Milan's FTSE Mib shares index meanwhile rebounded 0.86 percent to 17,439 points, having slumped by 3.36 percent on Wednesday on concerns over Italy's banking and energy sectors.

In London, AstraZeneca was the biggest faller, with shares nosediving 3.16 percent to 3,053 pence.

The Anglo-Swedish pharmaceuticals giant said net profits sank 37 percent last year, hit by the expiry of drug patents, and warned revenues would also fall heavily in 2013.

Energy giant Royal Dutch Shell saw its 'A' share price drop 2.8 percent to 2,241 pence after announcing that net profits sank 14 percent last year despite an upbeat final quarter.

On the upside, shares in British brewer Diageo jumped 1.78 percent to 1,886 pence on news that net profits soared 61 percent in the first half of its financial year, boosted by strong sales in emerging markets and the US.

And the share price of British pay-TV giant BSkyB gained 0.93 percent to 817.5 pence after it posted a ten percent increase in interim profits.

European equities had fallen Wednesday on news that the US economy -- the world's biggest -- unexpectedly shrank in the fourth quarter of 2012.

Asian markets were mixed Thursday, balancing the drop in US GDP with the US Fed staying the course on its ultra-loose monetary policy as expected.

The Federal Reserve, wrapping up a two-day policy meeting on Thursday, dismissed the Q4 contraction as "transitory", and said that growth should be moderate moving ahead.

US stocks were down in midday trade on Thursday, with Facebook shares sinking over three percent after the social networking giant reported a big fall in year-over-year earnings and signalled higher costs as it invests in data centers.

The Dow Jones Industrial Average was down 0.17 percent to 13,886.11 points.

The broad-based S&P 500 dropped 0.29 percent to 1,497.65 points, while the tech-heavy Nasdaq Composite slid 0.10 percent to 3,139.19 points.