Goldman Sachs lifts view on ING Group; U.K. retail sales decline
LONDON (MarketWatch) -- European shares declined on Thursday, with oil producers unwinding some gains amid worries about economic growth trends, although Dutch financial conglomerate ING Group jumped after a broker upgrade.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP 205.81, +1.18, +0.58%) edged down 0.6% at 203.46, the fifth straight day of losses for the index.
"[The] reality check we had anticipated on the equity market is now underway," noted Tammo Greetfeld, strategist at UniCredit.
He said that in this situation "risks will probably move more strongly" to the foreground.
"We do, however, see good odds for, on balance, positive surprises. For that reason, we are sticking to our constructive equity market assessment for the coming months," he added.
On a regional level, the U.K. FTSE 100 index (UK:UKX 4,299, +20.59, +0.48%) declined 0.5% to 4,256.83, the German DAX index (DX:DAX 4,845, +44.99, +0.94%) slipped 0.2% to 4,790.19 and the French CAC-40 index (FR:PX1 3,200, +38.75, +1.23%) moved down 0.1% to 3,157.70.
Stocks edged lower early in the U.S. trading day while Asia markets ended lower. See Asia Markets.
Oil producers were among the worst performers in Europe, with BP (UK:BP. 487.00, -3.50, -0.71%) (BP 48.15, -0.25, -0.52%) shares down 1.7% and Repsol (ES:REP 15.66, -0.02, -0.13%) (REP 21.93, +0.13, +0.60%) shares down 1.4%.
The sector has performed strongly since March, as investors hoped that a stabilizing economic backdrop will boost demand for oil.
"Oil prices have been quick to discount a recovery," noted analysts at Credit Suisse. However, "the recovery remains elusive," they added.
On Thursday, data showed that U.K. retail sales fell by 0.6% in May, a reading that was much weaker than expected.
"We expect consumer spending to be muted for some considerable time to come," noted Howard Archer, economist at IHS Global Insight. "This will limit growth prospects," he added.
Retailers Hennes & Mauritz (SE:HMB 365.00, 0.00, 0.00%) and Inditex (ES:ITX 33.75, -0.15, -0.44%) , which both operate in the U.K., were lower with H&M shares down 1.1% in Stockholm and Inditex shares down 0.9% in Madrid.
Automakers, which are also perceived as sensitive to consumer spending trends, were also weak, with Renault (FR:RNO 27.10, -0.27, -0.97%) shares down 2.9%.
Fiat (IT:F 7.06, -0.09, -1.26%) shares fell 1.8%. It said that it will stop car production at a plant in Sicily in 2011 as it seeks to contain costs in the current economic environment.
