European shares slip, drug stocks mixed

European shares closed over half a per cent lower yesterday as tech stocks fell after Apple Computer missed expectations on quarterly revenue while drug stocks had a mixed day with Schering dipping.

The German firm lost over four per cent after it said it would stop giving uterine fibroid drug asoprisnil to patients in an extension to a late-stage trial due to adverse effects.

"This drug is close to dead," said Equinet analyst Martin Possienke. "It's difficult to believe that you can bring a drug to the market for benign tumours that causes complications needing invasive procedures."

Other pharmaceutical stocks rose however, after US peer Pfizer won a patent battle while GlaxoSmithKline had already been boosted by an upgrade from Dresdner Kleinwort Wasserstein to "add".

The pan-European FTSEurofirst 300 index unofficially closed 0.68 per cent lower at 1,204.6 points, further distancing itself from a 41-month high of 1,242.2 points struck last week.

The index cut losses following the Pfizer announcement, which also pushed the Dow Jones Industrial average into positive territory after opening down.

The small rise on the Dow was not enough to rally European bourses late on, however, with the technology-laden Nasdaq Composite hit by Apple's figures after-hours on Tuesday.

Among leading national indexes, Britain's FTSE 100 fell 0.7 per cent, France's CAC shed 0.8 per cent and Germany's DAX tumbled one per cent.

Oil prices, adding nearly one percent to $64.10 a barrel on fears of a rebound in petroleum demand, further undermined equity sentiment.

On the upside, ASML shrugged off the tech sector's malaise to rise 1.25 per cent after the Dutch chip equipment maker beat third-quarter profit expectations and forecast a strong 2006.

PartyGaming also bucked the trend to jump over nine per cent after fellow online gambling firm Sportingbet said it had quadrupled its year profits.

The sector has been volatile of late as investors weigh up whether the internet casino bubble might be bursting, with PartyGaming falling 11 per cent on Monday after Empire Online said the market was almost flat in the third quarter.

"These figures have given a much needed fillip to the gaming sector and have gone against the grain in insisting that online poker in particular is still showing signs of growth," Richard Hunter at Hargreaves Lansdown Stockbrokers said of Sportingbet's results.