EUROPE MARKETS
European shares edge lower, bank earnings eyed
Barclays, Credit Agricole shares lose ground, Zurich Financial up
By Sarah Turner, MarketWatch
Last update: 3:40 a.m. EDT May 15, 2008
LONDON (MarketWatch) - European shares declined in early trading on Thursday as investors weighed up a mostly downbeat set of earnings from the hard-hit financial sector.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP: news, chart, profile) lost 0.5% to 325.55, with miners also lower as companies such as BHP Billiton (BHPBHP
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BHP) (UK:BLT: news, chart, profile) and Rio Tinto (RTPRTP
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RTP) (UK:RIO: news, chart, profile) dropped more than 2% each, giving up some recent deal-hope inspired gains.
Of national indexes, the U.K. FTSE 100 index (UK:UKX: news, chart, profile) lost 0.6% to 6,177.30, the German DAX 30 index (DX:1876534: news, chart, profile) fell 0.6% to 7,045.09 and the French CAC-40 index (FR:1804546: news, chart, profile) lost 0.6% to 5,026.77.
U.S. stocks ended with gains on Wednesday, but off highs of the day, as some analysts questioned a government report showing tepid inflation. See full story.
Turning to the European banking sector, shares in France's third-largest bank Credit Agricole (FR:004507: news, chart, profile) fell 1.5% after it confirmed a 66% drop in first-quarter net profit to 892 million euros ($1.4 billion) after booking impairments and that it will launch a 5.9 billion euros capital increase to reinforce its capital position.
Agricole on Tuesday had said it was considering such an increase.
Shares in British lender Barclays (BCSBCS
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BCS) (UK:BARC: news, chart, profile) lost 1.4% after stating that its first-quarter profit fell from a year earlier due to tough capital market conditions in March.
Its investment bank unit took a net 1 billion pound hit as write-downs were offset by gains elsewhere. The bank made no mention of any need for more capital, though Finance Director Chris Lucas didn't rule one out during a conference call.
KBC (BE:000356573: news, chart, profile) shares dropped 6.4% as the Belgian bank reported a 44% profit fall, hurt by its portfolio of collateralized debt obligations.
However, shares in French bank Natixis (FR:012068: news, chart, profile) advanced 5.6% as the firm said that it planned to tackle an 88% plunge in first-quarter net profit to 69 million euros ($107.2 million) by cutting its cost base by 10% in 2009.
And Swiss insurer Zurich Financial Services (CH:001107539: news, chart, profile) climbed 2% after the firm reported a forecast-beating 3% rise in first quarter net profit to $1.43 billion and said it was on track to reach its targets.
Away from financials, shares in French media giant Vivendi (FR:012777: news, chart, profile) advanced 2.8% after the firm's first-quarter adjusted operating profit fell 9.6% to 697 million euros ($1.1 billion) but still managed to beat analyst forecasts. |
