European shares slip as investors gauge earnings ahead of ECB decision

Updates prices throughout; adds analyst comment

By Avinash P and Johann M Cherian

Feb 5 (Reuters) - European shares slipped on Thursday as investors assessed mixed earnings from a string of companies including heavyweights Shell and BNP Paribas, while awaiting the European Central Bank's verdict on monetary policy.

The pan-European STOXX 600 .STOXX edged 0.5% lower to 615.02 points, easing from the record high the index touched on Wednesday.

Corporate reports were dominated by banks and resources companies as investors scrutinized earnings to gauge sentiment amid geopolitical uncertainty and a clouded macroeconomic environment.

BNP Paribas BNPP.PA climbed 3% after the euro zone's largest lender by assets reported better-than-expected fourth-quarter profit.

BBVA BBVA.MC fell 6.3% and weighed on Spain's IBEX .IBEX index as higher-than-expected costs overshadowed the bank's higher quarterly net profit.

Some southern European banks did extremely well in 2025. And the markets are looking for a repeat performance. Anything less is going to be punished in the share price, said Craig Cameron, portfolio manager at Templeton Global Equity Group.

On the commodities front, British oil major Shell SHEL.L slipped 1.6% after missing fourth-quarter net profit expectations.

Neste NESTE.HE, the leading global producer of sustainable aviation fuel, slid 8% after issuing a 'soft' renewable products sales volumes guidance.

Mining .SXPP stocks fell 1.8%, with Aurubis NAFG.DE down 3.5% after Europe's largest copper producer reported quarterly operating core profit below estimates .

Investors will now shift their focus to a monetary policy decision by the ECB, expected later in the day.

The central bank is expected to hold rates but focus will be on policymakers' commentary after data on Wednesday showed underlying inflation in the EU cooled faster-than-expected, exacerbated by a strengthening euro EUR=.

Regional technology stocks rose 1.7% on Thursday, rebounding after recent pressure from Anthropic AI's latest update weighed on software companies, as Alphabet GOOGL.O reported upbeat results.

Among others, Volvo VOLCARb.ST was set for its biggest daily drop on record, tumbling 21% after the Swedish carmaker reported a 68% drop in fourth-quarter profit.

Defence stock Rheinmetall RHMG.DE fell 9.2% on signs of easing geopolitical tensions between the U.S. and Iran.

(Reporting by Avinash P and Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips and Tasim Zahid)

((Avinash.P@thomsonreuters.com;))