MW: European shares lackluster on last day of strong quarter
LONDON (MarketWatch) -- European shares were flat on the last day of a strong second quarter, with gains for banks and healthcare stocks offsetting losses for food producers.
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The pan-European Dow Jones Stoxx 600 index (ST:SXXP 208.14, +0.11, +0.05%) traded steady at 207.98.
The Stoxx 600 index is showing a gain of just over 18% for the quarter, and a rise of more than 5% year-to-date, according to data compiled by FactSet.
"The run-up has been from really horrendous lows," said Bernard McAlinden, strategist at NCB Stockbrokers.
"The market has been pricing out the risk that policy wouldn't work on the economy and that the financial system was terminally ill," he said. "The market is now pricing in some form of economic recovery," he added.
Banks were the best performers in the quarter, gaining more than 45%, as optimism about the economy returned. A small part of that advance was made on Tuesday, with the sector up 0.2%.
In the sector, Barclays (UK:BARC 286.00, +6.35, +2.27%) (BCS 18.35, +0.39, +2.17%) shares rose 2.1% to 286 pence. Deutsche Bank lifted the U.K. lender's price target to 365 pence from 220 pence, citing current profitability plus cheap exposure to a cyclical recovery.
Of regional equity markets, the German DAX index (DX:DAX 4,884, -1.38, -0.03%) edged down 0.1% to 4,881.38, the French CAC-40 index (FR:PX1 3,191, -2.73, -0.09%) slipped 0.1% to 3,189.10 and the FTSE 100 index (UK:UKX 4,294, -0.44, -0.01%) dipped 0.1% to 4,288.56.
U.S. futures leaned higher on Tuesday. Asian shares ended mixed. See Indications.
Drugmakers were also higher in Europe, as shares of Sanofi-Aventis (FR:SAN 42.52, +1.07, +2.57%) (SNY 29.48, +1.47, +5.25%) took back some of last week's steep losses with a 2.6% gain. Sanofi's losses have been tied to safety concerns over a diabetes drug.
On Tuesday, the firm announced that it is considering a plan for voluntary staff departures. The firm will not lay off staff, it said as it outlined a new R&D model under which it will combine its discovery research establishments in France.
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Preclinical activities in some sites of Spain, the United Kingdom, the United States and Japan will also be reorganized, with divestment or reconversion solutions sought for certain activities. The firm is also reevaluating the resources needed for central group functions located in the Paris area.
Still, other sectors that are less geared to economic improvement were weaker, including food producers and retailers.
Carrefour CEO Lars Olofsson detailed plans to reinvent the "hypermarket" format in France and to streamline the group's organization as he updated investors for the first time on the retailer's efforts to improve its price image in its home market. See full story.
Shares of Airbus owner EADS (FR:EAD 11.76, -0.18, -1.51%) fell 1.3%.
A Yemeni airliner with 153 people on board has crashed in the Indian Ocean, according to news reports. It's the second major accident involving an Airbus plane this month, following the loss of an Air France Airbus A330 on June 1 with 228 people on board.
Porsche Automobil Holding (DE:PAH3 48.17, +1.52, +3.26%) shares rose 3.6%.
Late Monday, the firm said that it has received a written offer from state-owned Qatar Investment Authority over a possible stake and options deal.
"The latest news that Porsche could sell the options it holds to increase its stake in Volkswagen to Qatar could create a new situation that could impact the share price of Porsche clearly in a positive direction," said analysts at UniCredit.
