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European shares pulled back from 11-month highs

European shares pulled back from 11-month highs
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First Published: Mon, Sep 14 2009. 01 53 PM IST
London: European shares fell in early trade on Monday, breaking a six-session winning streak and pulling back from 11-month highs, with banks and commodity stocks leading the fallers.
By 1:11pm, the FTSEurofirst 300 index of top European shares was down 0.9% at 984.58 points, after hitting its highest closing level in 11 months in the previous session.
Oil producers eased as crude fell on a firmer US dollar and on nagging concerns that prices may have run ahead of market fundamentals.
BP, Royal Dutch Shell, Total, StatoilHydro and BG Group lost 0.5 to 1.7%.
Metal prices also slipped as the dollar regained some ground after investors covered short positions, sending mining stocks lower.
BHP Billiton, Anglo American, Rio Tinto, Xstrata, Kazakhmys , Vedanta Resources and Eurasian Natural Resources were down 1.2 to 3.9%.
Banks were among the top losers, with KBC, BBVA, BNP Paribas , Commerzbank, Barclays, Societe Generale and Swedbank down 1.7 to 4.2%.
However, Stephen Pope, chief global market strategist at Cantor Fitzgerald, said any weakness offered a buying opportunity and he expected the FTSEurofirst 300 to hit 1,100 by year end.
“If you turn around and look at the economic numbers coming through, everything is showing signs of improvement,” Pope said, referring to Asian growth and Germany PMI data.
“I know there is an issue about how much longer government stimulus programmes can continue but believe me these western governments will do whatever it takes to make sure these economies don’t slip back and... double dip.”
Across Europe, Britain’s FTSE 100 slipped 0.6%, Germany’s DAX dropped 0.8% and France’s CAC 40 fell 1%.
US stocks broke a five-day winning streak on Friday, while Japan’s Nikkei average dropped 2.3% on Monday, pushed lower by exporters after the dollar hit a fresh seven-month low against the yen.
Investors will keep a close eye on euro zone employment data and industrial production figures, both due at 2:30pm.
The pan-European index has rallied 52 percent since hitting a floor in early March but it is still down 15% from its level in mid-September 2008 before the collapse of Lehman Brothers.
Cadbury added 0.9% extending last week’s 36% rally after Kraft Foods’ 10.2 billion pounds ($17 billion) approached for the UK confectionery group.
Cadburychairman Roger Carr said it was an “unappealing prospect” being absorbed into Kraft’s low growth conglomerate business model.
Among other top gainers in Europe, Finmeccanica put on 1.3% after the group said its DRS Technologies was chosen with another supplier to supply infrared technology.
Automakers were weaker, down 0.9%, weighed by a sectoral downgrade to “neutral” from “overweight” from Societe Generale.
Peugeot, which was cut to “underperform” from “outperform” by Credit Suisse, shed 3.8%, while Daimler, Volvo and Renault lost 1.3 to 3.2%.
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First Published: Mon, Sep 14 2009. 01 53 PM IST
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