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European Stocks Slip Ahead of ECB Meeting

LONDON ( The Deal) -- European markets retreated further on Thursday as investors digested weaker-than-expected German industrial production and another spate of corporate earnings ahead of the European Central Bank monetary policy meeting.

In London, the FTSE 100 shed 0.23% to 6,620.87, while in Germany the DAX lost 0.08% to 9,122.36. In France, the CAC 40 shaved 0.29% to 4,194.94.

Earlier in the day, Germany's Economics Ministry said that industrial output rose a seasonally adjusted 0.3% from May to June. That was well below the 1.2% monthly gain that had been expected by economists surveyed by Bloomberg News.

The latest figures from Europe's largest economy come hours before the European Central Bank is expected to hold interest rates steady. Investors will also be looking to the post-policy meeting press conference by ECB President Mario Draghi for any comments on the eurozone's economy and inflation outlook.

Escalating tensions over Ukraine also continue to weigh on global markets, after Russian President Vladimir Putin ordered a one-year ban on food imports from all countries that have imposed or supported sanctions against his country.

In Germany, Munich Re fell 2.26% to 3.49 euros after posting a lower-than-expected second-quarter profit of 765 million euros, amid rising claims costs; the latter includes 180 million euros related to a severe February snowstorm in Japan, not paid until the second quarter because of late claims reports.

Adidas was also down after cutting its 2014 profit forecast, citing continued weakness in the golf market and recent developments in Russia. The company is now projecting operating profit to amount to 5.6% to 7% of sales, compared to a previous forecast of 8.5% to 9% of sales. Adidas shares fell 2.63% to 56.62 euros.

Not all corporate news was bad. Commerzbank gained more than 2% in Frankfurt, after Germany's second-largest lender said second-quarter profit more than doubled.

In Zurich, Nestle rose 3.15% to 69.20 Swiss francs, after the world's biggest food company posted better-than-expected revenue growth in the first half. The company posted first-half sales of 43 billion Swiss francs, up 4.7% over a year ago excluding acquisitions, divestments and currency shifts.

Growth was especially strong in Latin America, with double-digit growth in most food categories, and good performances from Ninho fortified milks in the dairy category, Nescau in cocoa and malt beverages and KitKat in confectionery.

The company also announced plans to spend 8 billion Swiss francs this year and next in its first share buyback in three years. It confirmed its outlook for organic growth of around 5% this year, as well as improvements in margins, underlying earnings per share in constant currencies and capital efficiencies.

Zurich Insurance Group rose nearly 3.5% after posting a 6% rise in second-quarter profit to $837 million. CEO Martin Senn projected full-year cash remittances to exceed $3.5 billion, and said the company remains "on track" for 2014 and 2016 targets.

Asian stocks were mixed. In Tokyo, the Nikkei advanced 0.48% to 15,232. In Hong Kong, the Hang Seng fell 0.80% to 24,387.56.

Gaming companies Galaxy Entertainment Group and Wynn Macau, the Macau unit of Wynn Resorts (WYNN - Get Report), both fell in Hong Kong, after Macau posted the slowest monthly growth in mass market revenue since 2010.

The report, released late Wednesday, prompted analysts at Deutsche Bank to cut their 2014 forecast for revenue growth in the global gambling capital to 6% from 4%.

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