European shares fall as profits slump in chip maker Nokia

European shares fell on Thursday, as investors worried about persistent inflation and tightened central bank measures, while slumping profits for chip maker B.E. Semiconductor and telecommunications company Nokia raised fears of an economic slowdown.

Nokia shares fell 4.1 percent after the Finnish telecom equipment company’s quarterly operating profit fell short of analyst expectations. Its rival Ericsson also posted weaker-than-expected profits.

BE Semiconductor shares fell 2.8 percent after the company forecast fourth-quarter revenue declines, warning that US restrictions on exports to China added to uncertainty over the industry’s outlook.

The pan-European STOXX 600 index fell 0.4 percent, extending its decline from the previous session, as a series of worrying inflation data fueled fears that central banks will need to continue to tighten monetary policies, as well as optimism dissipated after recent earnings reports.

German 10-year government bond yields rose to 2.43 percent, their highest since August 2011, putting more pressure on stocks.

However, Finnish Nordea Bank’s profit beat estimates, and Hermes saw a sharp rise in sales growth with no signs of slowing down. Nordea shares reversed its early gains and fell slightly, while Hermes rose 4 percent, its level since 1990 at 150 against the dollar.