MW: European shares lower for second straight session
Swiss stocks weak as investors return from holiday
European stocks were lower heading into the end of the week on Friday, as Swiss investors returned from a holiday in a downbeat mood and drugmakers lost ground.
ST:SXXP 207.20, -0.37, -0.18%
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TWTF
The pan-European Dow Jones Stoxx 600 index (ST:SXXP 207.20, -0.37, -0.18%) declined 0.7% to 206.23, in what could be the second straight session of losses for the index.
The Swiss SMI index fell 1.9% to 5,401.59 as investors returned from the Ascension Day holiday to play catch-up with the rest of the European equity market which fell sharply on Thursday after Standard & Poor's cut the U.K.'s credit outlook.
Shares of Swiss banks were mostly weak, with UBS (UBS 14.39, +0.16, +1.12%) (CH:UBSN 16.53, -0.03, -0.18%) down 3.9% and Credit Suisse (CS 42.47, +0.66, +1.58%) (CH:CSGN 47.42, -0.08, -0.17%) shares down 2.3%.
Drugmakers fell broadly, with GlaxoSmithKline (GSK 33.38, +0.07, +0.21%) (UK:GSK 1,050, -14.44, -1.36%) shares down 1.6% in London.
GlaxoSmithKline is heading for a potential legal battle with the Internal Revenue Service over back taxes, The Wall Street Journal reported late Thursday on its Web site.
Sanofi-Aventis (SNY 30.67, +0.08, +0.25%) (FR:SAN 43.80, -0.52, -1.17%) shares fell 2% in Paris, while Qiagen (DE:QIA 12.00, +0.28, +2.39%) shares rose 1.4% in Frankfurt, amid market speculation that Sanofi-Aventis is considering a bid for the German biotech. Both firms declined to comment, Dow Jones Newswires reported.
The German DAX 30 index (DX:DAX 4,919, +18.61, +0.38%) declined 0.4% to 4,881.71, the French CAC-40 index (FR:PX1 3,231, +13.29, +0.41%) slipped 0.3% to 3,208.03 and the U.K. FTSE 100 index (UK:UKX 4,365, +19.27, +0.44%) traded flat at 4,343.77.
U.S. stocks were mixed in early trading. See full story.
Miners firm
Mineral extractors helped to limit downside, with shares of Rio Tinto (RTP 175.84, +5.63, +3.31%) (UK:RIO 2,764, +108.00, +4.07%) up 2.8%, Vedanta Resources (UK:VED 1,551, +59.00, +3.95%) shares up 1.5%, and Kazakhmys (UK:KAZ 684.00, +41.50, +6.45%) shares up 5.6% after all were upgraded by Goldman Sachs. Read London Markets.
Shares of German fertilizer maker K + S (DE:SDF 53.60, +2.55, +4.10%) rose 3.5% after an upgrade to buy at Citigroup.
"With some signs of demand improvement and what increasingly looks like a successful defense of its price over volume strategy, we see the potential for strong EPS recovery in 2010, driven by recovery in potash volumes," the broker said.
Banks were also strong, with BNP Paribas (FR:BNP 46.15, +1.15, +2.54%) shares up 2.2% and UniCredit (IT:UCG 1.84, +0.02, +1.21%) shares up 1%.
However, HSBC Holdings (HBC 42.80, +0.16, +0.37%) (UK:HSBA 536.25, -4.00, -0.74%) declined 1.5% after it said in a statement at its annual meeting that the rest of 2009 and probably much of 2010 will be challenging.
Shares of British Airways (UK:BAY 155.70, -7.10, -4.36%) fell 3.5% after 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.
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.
Telecom equipment makers were also under a bit of pressure, with Nokia (NOK 14.81, -0.13, -0.87%) down 4.8% and Ericsson (ERIC 8.79, +0.15, +1.74%) shares down 3.4%, as both firms gave back some recent gains.
