BackEurope shares edge down; weaker oils outpace banks
Europe shares edge down; weaker oils outpace banks
PremiumLondon: European equities drifted lower in early trading on Tuesday after sharp gains in the previous session, with weaker commodity shares offsetting gains made by financial stocks, which were supported by BNP Paribas.
At 1:38pm, the FTSEurofirst 300 index of top European shares was 0.2% lower at 999.76 points after rising 1.8% in the previous session.
The benchmark index is up 20% this year and has surged 55% since hitting a record low in early March. It has gained 17.6% in the third quarter and is on track to post its best quarterly gains in almost a decade.
Energy shares came under pressure as crude oil prices fell 0.2% to trade below $67 a barrel ahead of weekly US crude inventory data, with BP, Royal Dutch Shell, BG Group, Tullow Oil, Repsol and Total shedding 0.1-1.4%.
“The market has come a long way in a relatively short period of time, but there have been some concerns and investors remain nervous," said Keith Bowman, analyst at Hargreaves Lansdown.
“We have got very crucial figures coming up later this week which are important to the direction of the market going forward," he added.
Investors will keep an eye on the September consumer confidence report from the United States and a house price update from Case/Shiller for July. Later in the week, focus will be on the U.S. non-farm payrolls data.
Miners also lost ground as copper prices fell 0.7% and aluminium was down 0.8%. BHP Billiton, Anglo American , Antofagasta, Rio Tinto, Xstrata and Eurasian Natural Resources fell 0.5-1.7%.
Banks up, BNP Paribas helps
Financial shares were in demand. The DJ STOXX banking index , which has jumped 173% since March lows, rose 0.6%.
BNP Paribas rose 2.5% as investors welcomed its move to launch a €4.3 billion capital increase and pay back the French state for aid it had earlier received.
“Paying back the state will give them more independence in running their business, especially in their important trading activities," Agilis Gestion fund manager Arnaud Scarpaci said.
Other banks were also higher. Standard Chartered, HSBC, Barclays, Lloyds, Royal Bank of Scotland and Societe Generale gained 0.3-3.4%.
European planemaker Airbus fell 1% after it confirmed it had cut its 2009 delivery target for A380s by one aircraft to 13 planes and said it was maintaining its delivery forecast for 2010.
Spain’s FCC jumped 6.3% after Deutsche Bank upgraded its rating to “buy" from “hold", citing the builder’s exposure to a possible early construction recovery in Spain and Eastern Europe.
Across Europe, Britain’s FTSE 100 index, Germany’s DAX and France’s CAC 40 fell 0.3-0.5%.
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