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European stocks slip again
LONDON, England -- Insurers and oil shares such as Total led European stock markets down Thursday. Markets were affected by the weak dollar and earnings worries which persuaded investors to lock in profits from the recent rally. Germany's Munich Re led volatile insurance shares down, shedding 3.5 percent after Allianz said it would cut its stake in the reinsurer earlier than planned by three percentage points to 16-18 percent as part of a scheme announced in March. And France's Total fell two percent after Chief Executive Thierry Desmarest said in a newspaper interview the oil major's second-quarter earnings would be lower than those of the first quarter amid poor petrochemical margins and a weaker dollar. This reignited fears that unfavourable currency effects and still sluggish economic conditions may have impacted European earnings more brutally than investors had expected and could lead to sharper market corrections. The London FTSE 100 closed 0.64 percent down at 4,028.80, the Paris CAC-40 closed down 1.33 percent at 3,098.28 and the Zurich SMI ended 0.35 percent off at 4,859.20. At 1630 GMT the Frankfurt Xetra DAX was down 1.79 percent at 3,263.10. An hour before the pan-European FTSE Eurotop 300 index was down 1.04 percent at 854 points, while the narrower DJ Euro Stoxx 50 index was down 1.33 percent to 2,441. "There will be good and bad results as the impact of the weak dollar has been priced in in some stocks but not in others," Adrian Darley, senior investment manager at Gartmore Investment Management told Reuters. "Markets will look at this day by day," he said. "Some companies will have hedged so earnings will be fine. Some will already have told investors they have a currency problem and they may be fine. Others won't have told investors and that's where you may find a problem." Wolseley -- the world's largest supplier of plumbing and heating equipment, which generates about two thirds of its sales in North America -- joined the growing list of companies warning that a weaker dollar would hurt its results. The dollar has slid against the pound in recent months, reducing the amount of the British currency the company receives for each dollar earned abroad. Its shares sagged 1.5 percent. Investors dumped selected technology stocks like French telecom equipment maker Alcatel and Dutch chip equipment maker ASML, pocketing the profits of a recent strong bullish run. Shares in French American software company Business Objects dropped 5.8 percent as speculation swirled that the company's U.S. sales chief had left the company, with some dealers citing a possible slowdown in sales as a reason for the departure. No one at the company was available to comment. Elsewhere, cosmetics titan L'Oreal erased earlier losses to close 0.3 percent higher as investors went past a larger-than-expected 3.2 percent fall in first-half sales to take comfort in news the firm stuck with a target for double-digit growth in net profit before exceptionals. On the upside, AstraZeneca jumped 3.7 percent on investor relief that a U.S. regulatory panel backed cholesterol fighter Crestor, its biggest new drug hope. Shares in Britain's Shire Pharmaceuticals belatedly joined a rally in U.S. pharmaceutical stocks on Thursday, also boosted by hopes that regulators will approve its key kidney disease drug Fosrenol. Shares in Britain's largest telephone directories publisher Yell Group enjoyed a buoyant market debut that valued the company at two billion pounds, Britain's largest flotation for two years. In a sign that investor demand for share issues is picking up after a long, lean spell, the Yellow Pages firm increased the size of its initial public offering by 290 million pounds to 1.14 billion pounds ($1.9 billion).
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