European stocks dropped from a six-year high as Telefonica’s earnings missed estimates and Petrofac lowered its profit outlook.

Nickel headed for the biggest weekly gain in four years and India’s benchmark equity gauge rose to a record.

The Stoxx Europe 600 Index slid 0.4 per cent at 10.33 am in London.

Standard and Poor’s 500 Index futures dropped 0.2 per cent.

A rally in European bonds pushed Spanish and Italian yields to records lows. Telefonica, Europe's biggest investor in Latin American telecommunications, reported a 14 per cent slide in profit, while Petrofac, an oil and gas engineer, said project delays will hurt earnings. Telefonica fell 2.4 per cent. Petrofac slumped 17 per cent.

The results came as data showed Germany’s trade surplus grew less than projected last month while China’s consumer price index decelerated to the slowest pace in 18 months.

Analysts at Goldman Sachs and JPMorgan Chase were among those who said they expect interest-rate cuts at the European Central Bank’s June meeting following comments from ECB president Mario Draghi yesterday.

“It’s a mixed picture in terms of earnings,” Philippe Gijsels, chief strategy officer at BNP Paribas Fortis, said by phone from Brussels.

“What we got from the ECB yesterday was clearly positive, but underneath the positive tone from the market, there are some worrying issues” on the earnings front, he said.

French network-equipment maker Alcatel-Lucent advanced 4.2 per cent after posting a narrower first-quarter loss.

Bloomberg