Vodafone drops after China deal as other telecom stocks gain By Simon Kennedy, MarketWatch LONDON (MarketWatch) -- European stock markets dropped Wednesday, extending losses into a second session, with modest gains for some utilities and telecoms stocks helping take the edge off a further decline in the banking sector. The Stoxx Europe 600 index (ST:SXXP 259.42, -0.34, -0.13%) fell 0.3% to 258.94. Among the main regional indexes, the U.K. FTSE 100 index (UK:UKX 5,374, -33.46, -0.62%) dropped 0.8% to 5,363.45 and the French CAC 40 index (FR:PX1 3,621, -22.46, -0.62%) fell 0.7% to 3,617.28. The German DAX 30 index (DX:DAX 6,076, -41.61, -0.68%) declined 0.8% at 6,070.74. Banks were again the biggest fallers in the region. Barclays (UK:BARC 303.40, -10.60, -3.38%) (BCS 19.13, -1.15, -5.67%) dropped 1.9% in London, extending losses in the previous session when it named Robert Diamond as its next CEO, with a reported downgrade from Bernstein Research also weighing on the stock. Shares of Credit Agricole (FR:ACA 10.20, -0.44, -4.14%) dropped 3.1% in Paris. Utilities stocks were mostly higher, with Electricite de France (FR:EDF 32.85, +0.02, +0.05%) up 0.6% after announcing late Tuesday that its board of directors has approved the sale of its U.K. electricity distribution networks to Cheung Kong Infrastructure. The deal, first announced in July, should reduce net debt by 6.8 billion euros ($8.6 billion), the company said. Also in Paris, shares of GDF Suez (FR:GSZ 26.55, +0.26, +0.99%) were up 0.6%. Shares in U.K. mobile telecom giant Vodafone Group (UK:VOD 157.90, -2.00, -1.25%) (VOD 24.46, -0.38, -1.53%) slipped 1% in London after the company said it will sell its entire 3.2% stake in China Mobile (CHL 50.25, -1.17, -2.27%) for around 4.3 billion pounds ($6.6 billion). The company is selling the shares through an accelerated bookbuild and will return 70% of the net proceeds to shareholders through a buyback. While Vodafone share slipped after the announcement, most other European telecoms stocks were higher. BT Group (UK:BT.A 139.00, +0.40, +0.29%) added 0.9% in London and Telecom Italia (IT:TME 0.21, +0.01, +4.54%) was up 0.5%. Elsewhere in Europe, shares in Swiss luxury goods group Richemont (CH:CFR 41.34, -0.52, -1.24%) dropped 1.3% after the group said results will face increasing headwinds in the second half of the year, due to a tougher year-earlier comparison and the stronger Swiss franc. U.K. house builder Barratt Developments (UK:BDEV 100.60, -3.70, -3.55%) also lost ground, dropping 3.6% in London after it reported a smaller loss for the year, but said the outlook for new housing in the country remains challenging.

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