London: European shares were lower at midday on Thursday in a choppy session, with energy stocks dropping on weaker crude prices and the banking sector falling from earlier rises.
By 10:52am, the pan-European FTSEurofirst 300 index of top shares was down 0.4% at 828.49 points, having been up as much as 834.32 points and down as low as 822.96 points.
“It is very mixed, but is not as bad as what it could have been given the carnage in US and Asian markets overnight. There does not seem to be any strong trend today. It is a lacklustre kind of a session. The market is taking a breather,” said Peter Dixon, strategist at Commerzbank.
Energy stocks were the biggest loser as crude lost 1.7%. Cairn Energy, BP, Royal Dutch Shell and Total were down 1.2 to 3.4%.
UBS rose 2.8% on reports the Swiss government is seeking a quick exit from its investment in the country’s biggest bank. The government said there will be no statement on the stake on Thursday and that it is still considering what to do when the UBS lock-in period ends on 9 June.
Meanwhile, also a focus for the financial sector was news that the Obama administration had proposed tougher controls for over-the-counter derivatives.
The plan included some Capitol Hill ideas to revamp regulations, such as mandatory clearing of standardized OTC derivatives, moving standardized OTC trading onto regulated markets and trading limits on some “look alike” contracts.
“It is hard to say. This might affect some of the financials. Obviously it will hit the big banks which have trading operations and hedge funds as well, but I am not sure if it is a huge thing that is on people’s minds today,” said Dixon.
HSBC, Barclays, Standard Chartered and Credit Suisse were up 1.4 to 5.8%.
Back on the downside, SBM Offshore slipped 12.5% after the Dutch maritime engineering group lowered its full year guidance and said it did not secure any major new orders for its floating production, storage and offloading platforms (FPSO’s) for oil firms in the first quarter.
Later in the session, investors are likely to eye US producer prices and US weekly initial jobless claims both released at 6:00pm today.
Across Europe, the FTSE 100 index was down 0.1%, Germany’s DAX was 0.7% lower and France’s CAC 40 was down 0.6%.