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European shares down 1% on weak banks

European shares down 1% on weak banks
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First Published: Tue, Apr 07 2009. 03 42 PM IST
Updated: Tue, Apr 07 2009. 03 42 PM IST
Frankfurt: European shares fell for a third consecutive session on Tuesday as financials weakened along with US futures, reigniting fears over the global banking sector.
Figures that showed the euro zone economy shrank more than previously thought in the fourth quarter of 2008 also added to investor worry.
At 1pm, the FTSEurofirst 300 index of top European shares was down 1% at 758.72 points, after having been as high as 772.24 points. The index has risen 17.5% since hitting a lifetime low on 9 March.
The DJ Stoxx Insurance Index and the DJ Stoxx Banks Index were the top sectoral losers, down 3.7 and 3.2% respectively.
UBS, Deutsche Bank, BNP Paribas and Barclays were all down 4.1 to 5.5%.
“Financial stocks are subject to profit taking after the steep gains of the last weeks ... we do not see any positive input into the market from overseas,” said Postbank equity strategist Heinz-Gerd Sonnenschein.
US futures, down 0.3-1.2%, pointed to a lower opening on Wall Street. The S&P500 broke a four-day winning streak on Monday after a prominent analyst revived worries over the health of banks.
Sonnenschein also said that investors were focused on earnings from aluminium maker Alcoa, which kicks off the eagerly awaited earnings season in the United States.
Utilities, defence stocks gain
Shares in European defence stocks gained as the United States defence budget earmarked bigger funding for the F-35 joint strike fighter jet.
BAE Systems rose 6.6 percent and EADS was up 0.6%.
“BAE is the big beneficiary - it builds around 20 percent of the F-35,” says Evolution analyst Nick Cunningham.
Food and beverage producers added most points to the index, with Heineken, Nestle, Unilever and Danone up 0.9 to 1.8%.
Across Europe, Britain’s FTSE 100 was down 1.1%, Germany’s DAX lost 1.1% and France’s CAC-40 was down 1.2%.
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First Published: Tue, Apr 07 2009. 03 42 PM IST
More Topics: Markets | Europe | Stocks | Economy | Recession |