Banks drag European shares lower; techs up

By Joanne Frearson

LONDON (BestGrowthStock) – European shares fell on Wednesday, led by banking stocks on investor concerns over how Greece will finance its debt as talks to hammer out details of a potential aid plan began.

The pan-European FTSEurofirst 300 index of top shares closed down 0.7 percent at 1,096.10 points. The index which gained nearly 26 percent in 2009 is only up 4.8 percent this year.

Banks snapped the previous session’s gains to feature among the worst performers. HSBC, Banco Santander, BNP Paribas and UBS

lost 1.4 to 3.4 percent. Greek bank shares fell nearly 3 percent.

“The equity markets problems (weakness today) are really because of the sovereign debt concerns and the political discussions surrounding it … there is still uncertainty,” said Giuseppe-Guido Amato, strategist at Lang & Schwarz in Frankfurt.

“U.S. company earnings have been good, but investors are still staying on the sideline.”

Technology stocks got some support after Apple’s results beat expectations, with Ericsson and Alcatel-Lucent both rising 1.6 percent.

In other results news, Volkswagen gained 3.8 percent after it said first-quarter operating profit nearly tripled.

ENERGY STOCKS SLIP Energy stocks were out of favor following sharp rises in the previous session. Crude slipped 0.4 percent after government oil inventory data showed crude stockpiles rose 1.9 million barrels last week, against a forecast for a slight drop.

BP, BG Group and Total fell 1.1 to 2.6 percent.

Miners were also on the downside. Gold trimmed early gains as the euro fell (Read more about the trembling euro. ), while aluminum slipped back 1.3 percent.

BHP Billiton lost 2.8 percent after it reported lower quarterly production across metals and coal, with copper particularly hard hit and iron ore lagging that of rival Rio Tinto.

Anglo American, Antofagasta and Rio Tinto were down 2 to 2.8 percent.

Food retailers were among the gainers, benefiting by Goldman Sachs’s move to up its target on the sector to “neutral” from “cautious.”

Tesco, WM Morrison, J Sainsbury, Jeronimo Martins and Metro AG added 0.7 to 4.4 percent.

Across Europe, the FTSE 100 index fell 1 percent, Germany’s DAX lost 0.5 percent and France’s CAC 40 slipped 1.2 percent.

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(Reporting by Joanne Frearson; Editing by Hans Peters)

Banks drag European shares lower; techs up