European shares fell on Thursday, led by France's Alcatel-Lucent, which cut its full-year revenue forecasts, while record-high oil prices made oil and gas producers the top gainers in early trade.
By 0706 GMT the FTSEurofirst 300 index of top European shares was down 0.4 percent to 1,503.6 points, as Alcatel-Lucent shares fell by nearly 8 percent, making them the biggest drag on the broader market.
Global equities have rallied this week as investors are counting on the Federal Reserve to cut U.S. rates next week to limit the damage to the economy from the subprime crisis.
The corporate picture generally has been pretty robust in the first of the year, but people have an unease that that is backward-looking, said Darren Winder, head of macro and strategy research at Cazenove.
What the market is bracing for is an earnings shock and no one is quite sure what that is going to be, so investors have got their gloves up right now in anticipation of that shock.
Around Europe, London's FTSE 100 index was down 0.2 percent, while Frankfurt's DAX was off by 0.5 percent and Paris' CAC 40 lost 0.5 percent.