Tesco CEO to step down next year; Munich Re hikes Chile-quake loss estimate By Sarah Turner, MarketWatch LONDON (MarketWatch) -- European shares declined on Tuesday, as comments on the U.K.'s finances from Fitch pushed sovereign worries back into the spotlight, and Tesco and Munich Re lost ground. After rising as high as 243.68 early in the session the Stoxx Europe 600 index (ST:SXXP 239.97, -2.74, -1.13%) declined 1% to 240.26. The index ended with a 0.7% loss on Monday, the second decline in two days, after Friday's weak U.S. jobs data and Hungary's downbeat comments on its economic situation. Tuesday's losses came after the Fitch credit-rating firm said that the U.K.'s fiscal challenge is "formidable" and warrants a faster pace of deficit reduction than outlined in the April budget. Banks, leveraged to economic growth, were under pressure with Barclays (UK:BARC 281.85, -4.05, -1.42%) (BCS 16.22, -0.23, -1.40%) shares down 1.8% and BBVA (ES:BBVA 7.44, -0.10, -1.38%) shares down 1.6%. Societe Generale (FR:GLE 30.69, -0.31, -1.00%) shares fell 1.5%. The trial of Jerome Kerviel, the alleged rogue trader who bet 50 billion euros ($59.9 billion) on European stock markets, starts Tuesday. Kerviel is expected to claim that his former employer, Societe Generale, knew about the trades he made and the risks he took. On a regional level, the U.K. FTSE 100 index (UK:UKX 5,015, -53.79, -1.06%) lost 0.9% to 5,024.38, the German DAX index (DX:DAX 5,845, -59.57, -1.01%) fell 0.9% to 5,853.56 and the French CAC-40 index (FR:PX1 3,374, -40.17, -1.18%) dropped 1% to 3,380.84. Asian shares were mixed while U.S. stock futures were pointing to a bit of a rebound on Wall Street with Dow Jones Industrial Average futures up 20 points. The euro (CUR_EURUSD 1.1927, +0.0010, +0.0839%) declined 0.1% to $1.1919 against the dollar on Tuesday. Tesco names new CEO Of companies updating investors, shares of supermarket group Tesco (UK:TSCO 395.05, -12.05, -2.96%) fell 2.4% after it said that Chief Executive Terry Leahy will retire next March and will be succeeded by Philip Clarke. German reinsurance giant Munich Re (DE:MUV2 99.44, -1.46, -1.45%) declined 1.3% after lifting its estimate for pretax losses from the Feb. 27 earthquake in Chile to around $1 billion. It had previously forecast that losses would be around $700 million. The company said the first few months of 2010 were marked by a significantly large number of natural catastrophes. It anticipates a reinsurance claim of around 70 million euros for the storms that struck Europe at the end of February and has taken provisions of 160 million euros to cover the two hailstorms that occurred in Australia in March. BP (UK:BP. 413.15, -17.15, -3.99%) (BP 35.81, -0.95, -2.58%) shares were down 3%, bringing quarter-to-date losses to 33%, as it continues to battle to contain a massive oil spill in the Gulf of Mexico. Other oil and gas companies were also lower, with Total (FR:FP 37.28, -0.69, -1.80%) shares down 1.4% and Eni (IT:ENI 14.77, -0.19, -1.27%) shares down 1.3% as light sweet crude oil futures lost 24 cents to trade at $71.20. Power deal Shares of Chloride Group (UK:CHLD 341.10, +52.50, +18.19%) soared 19% to 342 pence after Swiss engineering group ABB (CH:ABBN 19.30, +0.08, +0.42%) (ABB 16.27, -0.18, -1.09%) offered 860 million pounds ($1.24 billion) for the firm. ABB, up 0.5%, is aiming to establish a leading presence in the market for uninterruptible power supplies. The company said it will pay 325 pence a share for Chloride, representing a 13% premium to Monday's closing price. It's also a 56% premium to the closing price on April 23, before Emerson Electric Co. (EMR 43.70, -1.27, -2.82%) made an offer of 275 pence a share, which Chloride rejected. Swiss food group Aryzta (CH:ARYN 40.55, +3.30, +8.86%) rose 9.1% after the firm said that the acquisition of Fresh Start Bakeries for $900 million and Great Kitchens for $180 million will double its manufactured volumes and give it a more balanced exposure to its core markets of North America and Europe. The deal is expected to boost earnings per share by around 20% over 12 months.

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