Energy, pharma drag European shares down for fourth day
European shares ended lower for a fourth straight session yesterday, pressured by energy and pharma stocks, with analysts detecting no early resumption of the market upswing without solid evidence of economic recovery. The FTSEurofirst 300 index of top...
European shares ended lower for a fourth straight session yesterday, pressured by energy and pharma stocks, with analysts detecting no early resumption of the market upswing without solid evidence of economic recovery.
The FTSEurofirst 300 index of top European shares closed 0.1 per cent lower at 949.82 points after trading in a wide range of 947.37 to 958.02. It is up 14 per cent this year and has surged 47 per cent since hitting a record low in early March.
Across Europe, Britain's FTSE 100 index, Germany's DAX and France's CAC 40 fell 0.4 to 0.6 per cent.
Drugmakers took the most points off the index, with AstraZeneca, GlaxoSmithKline, Merck, Novartis, Novo Nordisk, Roche Holding and Sanofi-Aventis down 0.6 to 2.2 per cent.
"We are going to see nothing but a phase of consolidation, maybe for several weeks," said Mike Lenhoff, chief strategist at Brewin Dolphin.
"The survey data have been consistently positive all along and the market has been pricing all these things in anticipation of a recovery.
"We actually need to get a confirmation of the survey data in the real economic numbers, such as GDP figures, for the markets to move on now," he added.
Data showed the eurozone services economy jumped back almost to recovery in August and was on course to grow in this quarter led by resurging Germany and France.
Energy shares also featured among top losers, with BP, Royal Dutch Shell, BG Group, Total and StatoilHydro shedding 1.0 to 1.2 per cent.
"The rhetoric of recovery seems to have lost some of its sheen of late ... Investors will be hoping that European finance ministers will be able to devise a blueprint for a relatively painless adjustment," said Tim Hughes, head of sales trading at IG Index.
"In the meantime, though, the cloud of uncertainty hovering above equities may have put an end to the raging bull market of the past months."
Britain, France and Germany said that although the world economy was stabilising, the crisis was not yet over and urged governments to implement fully their recovery plans while ensuring that they did not create the conditions for new global imbalances in the future.
Banks were among top gainers, with HSBC, Lloyds, Royal Bank of Scotland, UBS and Deutsche Postbank gaining 0.3 to 9.9 per cent.
The market got some support from better-than-expected sales data from key US retailers in August, but continued weakness in the labour market limited the impact.
The US Institute for Supply Management said its services index rose to 48.4 last month, slightly above the 48.0 median forecast of economists surveyed by Reuters, while initial jobless claims fell to 570,000 from a revised 574,000 the week before, but that was above economists' forecast for 560,000.
Investors awaited today's US non-farm payrolls data.