European shares steady after Wednesday's slump, Pearson jumps

By Atul Prakash

LONDON (Reuters) - European equities steadied on Thursday after slumping in the previous session following a rout in commodities prices, with a strong rally in shares of companies such as Pearson and Logitech underpinning the market.

Sentiment remained fragile as initial gains on Asian stocks fizzled out, with a further drop in crude oil prices seen maintaining downwards pressure on world markets.

The pan-European FTSEurofirst 300 index was flat in percentage terms at around 1,267 points after rising up to 1,282.49 points earlier in the session. It fell 3.3 percent to its lowest level since October 2014 in the previous session.

Shares in Pearson surged more than 10 percent after the British education publisher announced plans to cut 10 percent of its workforce, cap its dividend and restructure after cutting earnings forecasts for 2015 and 2016.

"Whilst it is disappointing to see further restructuring costs and little, if any, improvement in underlying markets, we are broadly encouraged that Pearson has decided to redouble its efforts to meet external and internal challenges," Roddy Davidson, analyst at Shore Capital, said.

"We believe the market will also be relived by its decision to maintain dividends at 2015 year levels."

Swiss-American technology accessories maker Logitech also jumped 8.9 percent after its quarterly results beat analyst forecasts.

However, Deutsche Bank fell 6 percent after saying it expected a net loss of 6.7 billion euros ($7.3 billion) for 2015 due to writedowns, litigation charges and restructuring costs.

The announcement by Germany's biggest bank has renewed concerns that it will now need to raise new capital to strengthen its finances.

The market awaited a meeting of the European Central Bank, which is expected to keep interest rates on hold but highlight increasing growth and inflation risks, raising the prospect of further policy easing later this year.

Investors have been concerned about the pace of global economic growth in the wake of a growth slowdown. U.S investment bank Citigroup cut its growth forecasts for the world economy.

"Risks to our growth forecasts probably remain to the downside, with increasing risks of global recession," Willem Buiter, global chief economist at Citi, wrote in a note.

(Additional reporting by Sudip Kar-Gupta; Editing by Alison Williams)