European shares slip on US worries
European shares were weaker by midday yesterday after falls in the US and Asia, with fresh merger talk limiting losses ahead of key US housing data later in the day that could provide cues on rate moves. At 1053 GMT, the FTSEurofirst 300 index of top...
European shares were weaker by midday yesterday after falls in the US and Asia, with fresh merger talk limiting losses ahead of key US housing data later in the day that could provide cues on rate moves.
At 1053 GMT, the FTSEurofirst 300 index of top European shares was down 0.35 per cent at 1,517.54 points.
"The markets have got the heebie-jeebies. They're taking their cue from Wall Street, which is taking its cue from corporate results and bond yields," said Mike Lenhoff, chief strategist at Brewin Dolphin.
"However appealing valuations may have seemed, people's view of fair value is changing because of earnings downgrades and interest rate worries." US stocks fell sharply on Thursday as a drop in oil prices hit shares of energy companies and as investors tried to lock in profits a day after the Dow Jones industrial average hit an all-time high.
Two French companies were the top gainers in Europe. Building materials group St Gobain rose 5.3 per cent after it said it was ready to sell its packaging unit, while cosmetics group L'Oreal climbed 4.1 per cent after posting strong results late on Thursday.
Among national indexes, France's CAC 40 was the worst performer with a 0.4 per cent fall, led down by defence and aerospace group EADS, which fell 1.6 per cent after a media report that Britain will review its contract with EADS if the group abandons an investment in the country.
Both Britain's FTSE 100 and Germany's DAX were down 0.5 per cent.
"We see 11 per cent earnings growth for blue chips this year, but the problem is that visibility of this earnings growth is low," said Christophe Donay, head of economic research and investment strategy at Kepler Equities in Paris.
"The result releases we've had so far are not strong enough to reassure markets about 2007 as a whole," he said.
The world's top confectionery group, Cadbury Schweppes rose 2.3 per cent on market talk of a 650 pence/share bid for the group.
Business Objects climbed 4.7 per cent on renewed talk of a bid from Oracle.
Retailer Metro was the top gainer in Germany, tacking three per cent on to its highest since February 2001 on a media report that the company would be broken up, traders said.