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Bears prowl European markets
LONDON, March 6 (Reuters) -- Bears prowled Europe's bourses again on Thursday, swiping at insurers after more bad news from Swiss Life and Aegon, and sending benchmark indices near six-year lows as the ECB's rate cut disappointed. Sluggish U.S. retail sales and a surprise jump in jobless claims there were also eyed by investors anxious about sliding Wall Street stocks, while continuing uncertainty about a timetable for possible war in Iraq kept up the selling pressure on both sides of the Atlantic. Speculation was rife about a news conference by President George W. Bush scheduled for 0100 GMT about "successes in the war against terrorism" and his determination to disarm Baghdad. "There is a very negative mindset out there and the bears have got plenty of ammunition at the moment, whether it's on the geopolitical scene, on the economic front or individual companies that are doing very badly, " said Nigel Cobby, managing director of European equities at J.P. Morgan in London. "A rate cut has been discounted... So we're back to looking at the individual companies coming out with numbers and there are enough poor numbers to keep the bears nicely fed and feeling like they can sell more stock." Insurers bore the brunt, on worries that they will become forced sellers of equities to maintain solvency levels. Swiss Life shocked investors by warning its 2002 loss would be twice as wide as analysts expected, sending its shares down 11.9 percent even while the insurer insisted it had wiped the slate for a better 2003. Blaming weak markets that pummelled its investments and spurred large write-offs, Switzerland's biggest life insurer said it saw a 2002 net loss of around 1.7 billion Swiss francs. Dutch insurer Aegon was also on the ropes, losing 10.5 percent after cutting its dividend and refraining from providing an outlook for 2003. "The sector is feeding off itself as the bad news continues -- the lower the sector goes the more people worry about what that's doing to their assets," said David Thwaites, European strategist at BNP Paribas. Shares in UK financial services group Old Mutual were also among Europe's biggest decliners, shedding 7.8 percent after it said it was placing new shares to raise £36 million, in order to fund payments relating to a U.S. management subsidiary. Other tumbling blue chips included French-American media group Vivendi Universal, which shed 4.3 percent to close at 12.4 euros in Paris -- then posted a whopping 23.3 billion-euro net loss for 2002, France's biggest corporate annual loss and greater even than France Telecom's 20.7 billion-euro loss announced on Wednesday. But Paris also had its share of brighter spots including utilities group Suez which vaulted 3.7 percent after it reported a narrower-than-expected net loss and said it reduced net debt by 7.2 percent. French plug and switch maker Schneider Electric was also among top blue-chip gainers in Europe, up 4.9 percent after it clawed back to net profit in 2002 and said it aimed to swell margins this year despite shaky market conditions. And Havas, the world's sixth biggest advertising group, jumped 13.5 percent after announcing it returned to profit last year and just beat a promised rise in operating margin. Amid individual share price moves, a war in Iraq remained at the front of investors' list of concerns. China backed a statement by France, Russia and Germany vowing to block a U.N. resolution authorizing war on Iraq, but the United States said Baghdad had just days left to accept peaceful disarmament. "Cash positions have been rising in recent weeks because everyone is nervous ahead of a possible war in Iraq. It is not certain that it will be a short and sharp war as in 1990/91," said Henning Kelch, a European fund manager at Commerz Asset Managers, based in Germany. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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