European shares fall, hit by weak earnings and banks * Pan-European FTSEurofirst 300 falls 2.2 pct* Roche lower after results miss expectations* Euro zone banks under pressure* Oil sector rises after Brent hits three-week high (Adds detail)By Alistair Smout and Danilo MasoniLONDON/MILAN, Jan 28 European shares fell on Thursday as disappointing earnings from Roche weighed on the healthcare sector and euro zone banks also came under pressure.By 1531 GMT, the pan-European FTSEurofirst 300 index was 2.2 percent lower at 1,311.13 points, while the euro zone's blue chip Eurostoxx 50 index also fell, down 2.8 percent.Roche dropped 4.1 percent after 2015 net profit from the Swiss drugmaker fell short of expectations and the company's forecast of an improvement this year met a sceptical market response. Its dividend also disappointed.Analysts at Deutsche Bank said Roche had been weighed down by its diagnostics business, high tax and foreign exchange effects. However, it reiterated its buy rating on the stock, saying underlying results were of good quality. "There are big FX headwinds from last year which are filtering through now ... and that's going to be the trend for Swiss drugmakers and for Swiss stocks more generally," said Joe Rundle, head of trading at ETX Capital.Fellow pharmaceutical firm Novartis fell 4.4 percent after many target price cuts from brokers following its own disappointing results on Wednesday.In all, the pharmaceutical sector was down 4 percent, extending falls in afternoon trade as U.S. biotech stocks came under pressure.Euro zone banks were down 3.5 percent, with several Italian lenders being suspended "limit down" for the second time in as many days. An EU scheme to help Italy's banks offload billions of euros of bad loans has been greeted with falls in the sector since Wednesday. The deal is a complex compromise, and could see the banks take significant losses on the debt."Europe is seven years behind the curve when it comes to sorting out the bad bank issues, which is why Europe hasn't recovered," ETX Capital's Rundle said."There's a realisation that while the issues are being dealt with, there are a range of further measures that will need to be taken."Fashion firm H&M fell 5.1 percent after the fashion firm warned that price reductions to help shift large stocks of winter wear after unusually warm weather and a strong dollar would weigh on its first quarter. Among the gainers were oil firms, after Brent crude hit a three-week high on signs that Russia was preparing to co-operate with OPEC on cuts to supply. The STOXX 600 Oil & Gas sector was up 1.5 percent.A top riser in the sector, Spain's Repsol rose 5.8 percent after announcing a 2.9 million euro writedown on its 2015 results, after oil prices plunged well below the $50 a barrel they had forecast as an adverse scenario.Despite the big writedown, analysts note that the underlying quarter was strong while debt reduction had also been positive.Electrolux added 4.4 percent, despite reporting a fourth quarter loss, with traders citing a better than expected underlying performance.Investors were also digesting the latest update from the U.S. Federal Reserve, which kept rates unchanged on Wednesday saying it was "closely monitoring" global economic and financial developments, signalling it wasn't ready to abandon a plan to tighten monetary policy this year.Today's European research round-up RCH/EUROPE (Editing by Raissa Kasolowsky and David Evans)
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