MW: European shares lower for second straight session
Swiss stocks weak as investors return from holiday
European shares moved lower for the second straight session on Friday, as Swiss investors returned from a holiday in a downbeat mood.The pan-European Dow Jones Stoxx 600 index (ST:SXXP 207.87, +0.30, +0.15%) declined 0.5% to 206.57, with the Swiss SMI index down 1.3%.
Swiss investors were playing catch-up with the rest of the market, which fell sharply on Thursday after the U.S. Federal Reserve gave a downbeat view on the economy and S&P downgraded the credit outlook for the U.K. to negative.
Banks, which have risen as hopes that the global economy has stabilized grew, fell sharply in the previous session across Europe and Swiss lenders dropped on Friday.
Other regional markets were mixed, with the German DAX 30 index (DX:DAX 4,937, +36.63, +0.75%) down 0.2% at 4,892.69, the French CAC-40 index (FR:PX1 3,242, +24.25, +0.75%) flat at 3,217.73 and the U.K. FTSE 100 index (UK:UKX 4,372, +26.86, +0.62%) also flat at 4,345.48.
U.S. stock futures painted a mixed picture for the Wall Street open.
Of companies updating on Friday, shares of British Airways (UK:BAY 155.10, -7.70, -4.73%) fell 7.1%.
The airline swung to a fiscal-year net loss of 358 million pounds in the twelve months to March 31. Last year it posted a profit of 726 million pounds. Revenue rose to 9.0 billion pounds, from 8.8 billion pounds a year ago.
British Airways attributed the loss to a tough economic environment and said that considerable uncertainty remains over the likely timeframe of the global economic downturn. See full story.
Meanwhile, Credit Suisse downgraded BSkyB (UK:BSY 451.25, +0.50, +0.11%) , down 1.3%, to underperform from neutral.
The broker noted that the firm trades on a 20% premium to its sector and called this unwarranted given the risks that lie ahead. "We believe there is downside risk to the market's perception that the company is immune to the cycle," the broker said.
Separately, the Times (of London) newspaper reported that British Sky Broadcasting and Channel 4 are in talks to merge their advertising sales teams.
BSkyB is 39.1% owned by News Corp. the parent company of MarketWatch.
Telecom equipment makers were also under pressure, with Nokia (NOK 14.94, -0.23, -1.52%) down 5% and Ericsson (ERIC 8.64, -0.11, -1.26%) shares down 3%.
But mineral extractors were having a better day, with shares of Rio Tinto (RTP 170.21, -4.92, -2.81%) (UK:RIO 2,797, +140.00, +5.27%) up 3.2%, Vedanta Resources (UK:VED 1,549, +57.00, +3.82%) , up 3.2%, and Kazakhmys (UK:KAZ 672.50, +29.00, +4.51%) shares up 3.7%.
Goldman Sachs upgraded Vedanta and Kazakhmys to buy from neutral and Rio Tinto to neutral from sell.
