European shares slid from a fresh four-and-a-half year high yesterday as weaker food and media stocks offset gains by retailers, while a dip on Wall Street added to the negative tone.

Corporate earnings dominated, with Reuters Group, Nestle and Centrica among the biggest losers as their outlooks disappointed investors. However, Thomson jumped as its core earnings beat forecasts.

The FTSEurofirst 300 index of leading European shares closed down 0.2 per cent at 1,355.46 points, after earlier hitting 1,361.7, a four-and-a-half year high.

"The market expects 10 per cent earnings growth for this year in Europe and I don't think it's excessive. The risk is low," said Guillaume Duchesne, equity strategist at Fortis Private Banking. "We are now at fair value."

Shares in Reuters, the news and information provider, fell 11.5 per cent. Citigroup analysts said in a note to clients that the company's results were disappointing both in terms of numbers and outlook.

Nestle, the world's largest food group, dropped 3.3 per cent after the company said high oil prices and a volatile political environment could affect business this year.

Also among notable blue-chip losers, Centrica fell 3.5 per cent after posting a record annual profit but warning of a tough year ahead.

On the upside, Thomson led gainers with a 5.9 per cent rise after its core earnings beat expectations and the company predicted a return to net profit this year.

Interest-rates jitters weighed on the European market after a surprise jump in German business sentiment fuelled worries of further European Central Bank rate hikes, prompting investors to cash in gains.

"The Ifo index lifted markets briefly before investors realised that the European Central Bank might now raise interest rates not just in March but also later," said Guenter Senftleben, a strategist at Bankgesellschaft Berlin.