Morgan Stanley reshuffles auto sector; Fortis shares stage rally
LONDON (MarketWatch) -- European shares moved off lows on Thursday, with a rebound in the fortunes of oil majors working to offset pharmaceutical-sector weakness.
The pan-European Dow Jones Stoxx 600 index eased 0.1% to 205.21, on the heels of three straight sessions of gains.
The U.K.'s FTSE 100 index (UK:UKX: news, chart, profile) stood out, rising 0.6% to 4,392.47. Meanwhile, the French CAC-40 index (FR:1804546: news, chart, profile) traded flat at 3,321.70 and the German DAX 30 index (DX:1876534: news, chart, profile) dropped 0.1% to 4,802.68.
Selling pressured drug shares, with Novartis (NVS:
45.69, -0.66, -1.4%) (CH:001200526: news, chart, profile) down 2.6% and GlaxoSmithKline (GSK:
35.44, -0.32, -0.9%) (UK:GSK: news, chart, profile) off 1.1%.
In the U.S., the Food and Drug Administration is mulling whether to let companies such as GlaxoSmithKline and Novartis continue to market certain drugs to treat asthma amid concerns about side effects, Dow Jones Newswires reported.
Still, gains from oil majors such as BP (BP:
46.17, +0.33, +0.7%) (UK:BP: news, chart, profile) , shares of which added 2.8%, and Total (FR:012027: news, chart, profile) (TOT:
53.17, +1.91, +3.7%) , up 3.3%, helped move European shares off their early lows.
Tullow Oil (UK:TLW: news, chart, profile) put in a solid performance. Shares rallied 15.3% in London, after the company said it's likely to see resource estimates increased following successful drilling in Ghana and Uganda.
In energy trading, light sweet crude futures moved higher, with the benchmark contract recently up $2.25 at $45.75 a barrel.
Across the Atlantic, stock futures turned higher. U.S. stocks rose on Wednesday as investors assessed signs of progress on extending bridge loans to the nation's auto industry. See Wednesday's U.S. Market Snapshot. Read more on automakers.
Autos in focus
For their part, European automakers struggled to make headway in Thursday dealings, with shares of Daimler (DAI:
33.87, +1.28, +3.9%) (DE:710000: news, chart, profile) surrendering 3.1% and BMW (DE:519000: news, chart, profile) slipping 0.8%.
Also lower, shares of Fiat (IT:F: news, chart, profile) fell 3.2%. Morgan Stanley downgraded the Italian automaker to underweight from overweight.
Moving higher, shares of Porsche (DE:PAH003: news, chart, profile) pulled back from early losses to trade up 0.5%. Morgan Stanley cut its stance on the manufacturer of high-performance and luxury vehicles to underweight from equalweight.
"We are cutting price targets across the board and adjusting ratings as we now model in a two-year economic downturn followed by a recovery to normal margins by 2012," the broker said.
In addition, Morgan Stanley upgraded France's Renault (FR:013190: news, chart, profile) to overweight from underweight.
Late Wednesday, the company said Louis Schweitzer will step down as chairman. Carlos Ghosn will take on the role of chairman while remaining chief executive.
Renault's shares rose 1.4%.
Retailers were also in the headlines, with shares of Spain's Inditex (ES:014839601: news, chart, profile) erasing early losses to trade up 3.7%.
The fashion retailer's targeting positive comparable sales in 2009. In the six weeks since the end of October, Inditex said has seen growth patterns similar to those of the third quarter.
Net profit in the first nine months of the company's fiscal year rose 2% to 843 million euros ($1.1 billion). Analysts polled by Dow Jones Newswires had, on average, been expecting a net profit of 858.2 million euros.
Outperforming a lower banking sector, shares of Dutch-Belgium banking group Fortis (BE:000380118: news, chart, profile) shot up 20.9%.
Several newspapers in Belgium reported Thursday that the Belgian government may give its 11.6% stake in BNP Paribas to Fortis.
Shares of BNP Paribas (FR:013110: news, chart, profile) declined 0.9%.
