European shares hit by weak earnings, Egypt

                                
 * FTSEurofirst 300 index down 0.5 percent
                                
 * Royal Dutch Shell falls after results miss expectations
                                
 * GlaxoSmithKline rises after announcing share buyback
                                
 * For up-to-the minute market news, click on [STXNEWS/EU]
                                
 
                                
 By Brian Gorman
                                
 LONDON, Feb 3 (Reuters) - European shares were lower on
Thursday after a batch of disappointing earnings reports,
notably from oil major Shell, and as unrest in Egypt
intensified.
                                
 There were no surprises from the European Central Bank,
which kept interest rates on hold at a record low of 1 percent,
but traders are now watching the bank's press conference for
signs of a sharper message that it is ready to tackle rising
inflationary pressures in the euro zone. [ID:nLDE7120I5]
                                
"Markets are coming round to the view that politicians are
very unwilling to see any tightening until unemployment is on
the way down. Policymakers are focusing more on unemployment
than inflation," said Colin McLean, managing director at SVM
Asset Management in Edinburgh.
                                
 "We should see good plenty of stimulus and good GDP numbers
of the United States and Germany this year."
                                
 At 1315 GMT, the pan-European FTSEurofirst 300 <.FTEU3>
index of top shares was down 0.5 percent at 1,156.40 points.
                                
  Oil stocks featured among the worst performers, with Royal
Dutch Shell <RDSa.L> down 3.2 percent after results fell short
of market expectations. [ID:nLDE71209F]
                                
 The STOXX Europe 600 oil and gas sector index <.SXEP> fell
1.1 percent, even as oil prices <LCOc1> hovered around $103 a
barrel, kept high by escalating unrest in Egypt, and adding to
concerns about inflationary pressures.
                                
 Banco Santander <SAN.MC> fell 2.1 percent after tumbling
Spanish property prices depressed net profits at the euro zone's
largest bank. [ID:nLDE71214Y]
                                
 McLean said he felt there was "nothing wrong" with most of
corporate earnings numbers, but that that some of the companies
had not given a sufficiently strong outlook statement, adding:
"The market in the last few days has been negative and wants to
take profits." 
                                
 On the upside, GlaxoSmithKline <GSK.L> rose 2.7 percent
after saying it would start buying back shares again in 2011,
signalling confidence that it has turned the corner following
massive legal bills related to claims over diabetes drug Avandia
and other matters. [ID:nLDE7120EP]
                                
 British telecoms provider BT <BT.L> rose 2.8 percent after
it said its recovering Global Services unit would generate cash
this year, and it reported a 7 percent increase in third-quarter
core profit as it continued to cut costs. [ID:nLDE7111LX]
                                
 Economic data suggested any rise in interest rates might
still be some time away. Euro zone retail sales unexpectedly
fell in December, with equal declines in food and non-food
sectors, a sign that consumers in the single currency bloc were
hesitant to spend even in the key holiday sales period.
[ID:nLDE7120Y2]
                                
  "Retail sales being a bit weaker was a bit of a surprise.
There are hopes out there if you get an improving labour market,
you will get better consumption, but the recovery is
industrially based, it is externally biased," said Philip
Isherwood, European equities strategist at Evolution Securities.
                                
 Across Europe, the FTSE 100 <.FTSE> index was down 0.6
percent, Germany's DAX <.GDAXI> was down 0.4 percent, and
France's CAC 40 <.FCHI> fell 1.4 percent.
 (Editing by Will Waterman)