London: European shares slipped on Thursday, snapping a five-session winning streak, as investors remained worried about the health of the financial sector even as recent US data raised hope for a recovery.
At 3:20pm, the FTSEurofirst 300 index of top European shares was 0.5% lower at 740.21 points after rising for five sessions in a row. But the index is still down 11% so far this year after plunging 45% in 2008.
Sentiment was also down after data showed British retail sales plunged more than expected in February as snowy weather and dismal economic conditions kept consumers away from the shops.
And a survey by market research group GfK showed that German consumer morale should fall slightly in April after a grim run of economic reports and economists expect rising unemployment to hit spending in the next few months.
Banks were broadly lower. Standard Chartered Bank fell 2.2%, HSBC was down 1.7%, Societe Generale fell 1.1%, Credit Agricole dropped 1.3% and UBS declined 1.7%.
But Barclays was up 4.2% and Lloyds gained 5%.
“The banking sector is a little bit overbought right now,” said Gerhard Schwarz, head of global equity strategy at Unicredit in Munich.
“We have seen very strong gains but it will be dependent on news flow ahead of the G20 meeting,” he said.
The Group of 20 leaders are scheduled to meet in London next week, while in the US, the Obama administration will propose tough new financial rules on Thursday as part of its push to stabilise the economy and curb excessive risk-taking that nearly wrecked its banks and set off a world financial crisis.
“The market is still strange and pessimistic, it is unbelievable,” said Thomas Nagal strategist at Equinet in Frankfurt.
Across Europe, the FTSE 100 index was down 0.4% Germany’s DAX rose 0.5% and France’s CAC 40 dropped 0.2 %.
BHP Billiton, Anglo American, Antofagasta, Xstrata and Eurasian Natural Resources rose 0.6-4.8%.
Mining giant Rio Tinto was up 3.5% after the company said it could sell more assets and reschedule debt if a proposed $19.5 billion tie-up with China’s state-owned aluminium firm Chinalco fails to materialise.
Energy shares were mixed. BP, Royal Dutch Shell, Repsol, BG Group and ENI were down 0.1-1%, but Tullow Oil gained 0.8% and Total rose 0.7%.
Among individual companies, Kingfisher, Europe’s top home improvements retailer, fell 2.9% after it unveiled plans to close a third of its loss-making Chinese stores and said it expected a “very challenging” year.
Hennes & Mauritz, the world’s third-biggest clothing retailer by sales, was down 5% after it posted a surprise 12.6% fall in its first-quarter pretax profits.
Volkswagen surged 11% as a €10 billion ($13.58 billion) refinancing deal for parent company Porsche on Wednesday sparked speculation that Porsche might increase its stake in Europe’s largest carmarker.