MW: Banks pull Europe stocks into negative territory
TNT Express rises after UPS takeover agreement
By Sara Sjolin, MarketWatch
LONDON (MarketWatch)—European stocks pulled back from an eight-month high Monday, led by banks, as investors paused for breath after recent rallies, while TNT Express NV rose after a takeover agreement.
The Stoxx Europe 600 index XX:SXXP +0.01% lost 0.2% to 271.81, potentially breaking a four-day winning streak.
“We have entered the doldrums of market indecision, where direction is not being led by any data or any outright sentiment,” said Owen Ireland, broker at Valbury Capital, in a note.
“This pause could simply be a sign that traders aren’t willing to completely sell into the off-risk days, and that the longer-term gist is one of positivity,” he added.
Among gainers in Europe, shares of TNT Express NL:TNTE +1.12% rose 1.1% after United Parcel Service Inc. UPS +2.12% agreed to pay $6.77 billion for the Dutch freight firm -- a 54% premium to TNT Express’s closing price Feb. 16, just before the companies said they were in talks. Read about TNT Express
Among notable decliners, logistics firm DSV AS DK:DSV -2.24% shed 2.4% as UBS downgraded the stock to neutral from buy, citing limited upside potential at the moment.
Elsewhere, banks weighed on the indexes. In France, Societe Generale SA FR:GLE -0.99% shed 1% and Credit Agricole SA FR:ACA -1.41% fell 1.2%. That pressured the CAC 40 index FR:PX1 -0.48% to the biggest loss among country-specific indexes and was off 0.7% at 3,569.50.
Further weighing on the index, Carrefour SA FR:CA -1.63% declined 1.4% and Renault SA FR:RNO -1.32% was off 1.3%.
Auto makers were also lower in Germany. BMW AG DE:BMW -2.01% traded 1.9% lower after Goldman Sachs affirmed its buy rating on the stock but removed it from its conviction-buy list. Daimler AG DE:DAI -0.61% lost 0.9% and Volkswagen AG DE:VOW -1.45% shed 2%.
Siemens AG DE:SIE -0.40% also added pressure in Frankfurt and lost 1.2% . The Telegraph reported Sunday that the industrial conglomerate is in talks with oil service firm Expro International to buy its manufacturing arm for $650 million. A spokesperson for Siemens declined to comment.
The DAX 30 index DX:DAX -0.33% was off 0.6% at 7,113.72.
However, both the German index and other European equities have room to rise in the medium-term and post gains in the second half of the year, Andreas Hurkamp, equity markets strategist at Commerzbank, said.
“In Germany, we had 19 firms raising dividends during earnings season and only three firms downgraded dividends. It’s a clear sign that companies with focus on the global consumer will continue to release good earnings statements and perform well in coming months,” he said.
“We might get a setback the next week and see a 5% to 10% correction, but it’s a chance to increase exposure to global growth winners,” he added, pointing to auto makers, chemicals and industrials as the winning sectors.
In the U.K. the FTSE 100 index UK:UKX -0.07% traded 0.4% lower at 5,943.69 as banks and resource firms edged lower. Read more about London Markets
Among U.K. banks, Barclays PLC UK:BARC -0.73% BCS -0.25% declined 1.3%, Standard Chartered PLC UK:STAN -0.87% fell 1.4% and HSBC Holdings PLC UK:HSBA -0.50% HBC -0.24% lost 1%.
Oil firm Tullow Oil PLC UK:TLW +0.13% was down 0.9% after HSBC cut the stock to underweight from neutral, and UBS downgraded it to neutral from buy. BG Group PLC UK:BG -0.55% fell 0.8%.
Supporting the U.K. index, Vodafone Group PLC UK:VOD +0.81% VOD +0.80% added 0.6%. The Sunday Times reported that the telecom firm may save 1 billion pounds ($1.58 billion) in taxes if it succeeds in bidding for Cable & Wireless Worldwide UK:CW +3.73% . Shares of Cable & Wireless Worldwide rose 3%.
Also bucking the negative trend in Europe, the Athens General Index GR:GD +1.78% traded 1.9% higher at 779.62.
Prime Minister Lucas Papademos, in an interview with the Financial Times, said the debt-laden country is halfway to economic recovery.
Shares of National bank of Greece SA GR:ETE +6.61% jumped 7.4% and Hellenic Telecommunications Organization GR:HTO +3.23% gained 2.9%. Read more about Greece
