Shell leads Europe stocks lower
 |
Story Tools
|
LONDON, England (Reuters) -- Rekindled merger talk in the banking sector and some positive corporate outlooks failed to rescue European shares on Thursday, as indices eased for a third straight session with oils leading the slide.
Deutsche Bank and drug firm Sanofi-Synthelabo rose, while Dutch-Belgian financial services group Fortis was helped by a strong debut in New York of its U.S. insurance arm Assurant.
Shares in debt-laden UK engineer Invensys gained 16 percent after a $5 billion refinancing to steady its balance sheet.
But despite some good news, investors were reluctant to push bourses higher in most cases as dealers said the market was dogged by rally-fatigue after January's 17-month highs.
"We had such a fantastic start to the year and upswing from December that the buying pressure took a lot of stamina out of the market,'' said Daniel Birch of Execution brokers.
The FTSE Eurotop 300 index ended down 0.22 percent at 976.74 points, its weakest close since mid-January.
"There are a lot of things happening outside the marketplace affecting the market. We have the G7 and employment numbers coming out tomorrow, so the market is saying let's hold on and see out the next few weeks,'' Birch said.
U.S. non-farm payrolls numbers due on Friday will be gleaned for keenly sought evidence the U.S. recovery is creating new jobs to prop up consumer confidence.
The Group of Seven economic powers meet on Friday and Saturday, but financial markets are already betting against any agreement on how to tackle the sickly dollar.
The pace of economic recovery is key to stock sector picks going forward as some analysts doubt if the high beta or volatile technology groups can continue with their blistering rally of the past few months.
"In the near term, if economic growth continues to surprise positively, asset allocation should favour cyclical sectors and markets but not necessarily the higher beta ones,'' said Frances Hudson, a strategist at Standard Life Investments.
The DJ Euro Stoxx 50 index of euro zone blue chips eased 0.13 percent to 2,816.34 points.
On Wall Street, the Dow Jones industrial average was flat at 10,473 points, while the Nasdaq Composite was also unchanged at 2,015 points.
Shell shunned, Deutsche Bank shines
Royal Dutch/Shell fell two percent in London after the oil group reported fourth-quarter results that came towards the bottom of forecasts.
The group, which shocked investors recently by cutting its oil reserves sharply, added further pressure on the stock by saying that oil and gas production would be flat this year and fall in 2005. A retreat in crude oil prices also weighed on the sector.
Meanwhile, shares in Deutsche Bank rose 1.3 percent after it emerged that Germany's biggest bank has had exploratory merger talks with U.S. peer Citigroup but they came to nothing.
Deutsche Bank also reported in-line fourth-quarter net profits and said a restructuring had left it very favorably positioned for industry consolidation.
Elsewhere in banking, France's BNP Paribas posted a 33 percent rise in quarterly profits, but concerns the bank could make a costly acquisition weighed on the stock which fell 1.4 percent.
Alcatel, Europe's biggest communications equipment maker, posted a much narrower quarterly loss, and said sales would grow in 2004 after falling for three years.
Nevertheless shares in Alcatel, which surged nearly 150 percent last year, shed two percent, while the sector's attention turns to Swedish telecommunications equipment maker Ericsson which reports on Friday.
Shares in Sanofi-Synthelabo rose 1.8 percent, with dealers and analysts speculating that if the French drug firm's 48-billion euro hostile bid for larger domestic rival Aventis fails, then Sanofi itself could become a target.
Aventis on Thursday promised double-digit sales and earnings growth over the next four years, in an attempt to fend off Sanofi's bid. Aventis shares eased 0.3 percent.
Copyright 2004
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
