Banks, volcano woes drag down European shares

* FTSEurofirst 300 index down 1 percent

* Banks fall on Goldman concerns; await Citigroup

* Energy, food producers, airlines down on volcano fallout

* For up-to-the minute market news, click on [STXNEWS/EU]

By Joanne Frearson

LONDON, April 19 (BestGrowthStock) – European shares fell on Monday,
led by banks as Friday’s fraud charges against Goldman Sachs
(GS.N: ) rattled investors, while energy, food groups and airline
stocks slipped on disruptions caused by the Icelandic volcano.

By 1119 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index of top shares was down 1 percent at 1,084.02 points. The
index, which gained nearly 26 percent in 2009, is only up 3.7
percent this year.

The STOXX Europe 600 bank sector (.SX7P: ) slipped 1.5 percent
following a 2.7 percent fall on Friday after Goldman Sachs was
charged with fraud by the U.S. Securities and Exchange
Commission. Goldman has denied the charges.

UBS (UBSN.VX: ), Credit Suisse (CSGN.VX: ), Deutsche Bank
(DBKGn.DE: ) and Societe Generale (SOGN.PA: ) fell 1.5 to 2.9
percent.

“It is (because of) Goldman Sachs and a reflection on the
developments from Friday and a good excuse for another day of
profit taking,” said Jim Wood-Smith, head of research at
Williams de Broe.

Investors were also awaiting results from Citigroup (C.N: )
which is set to post earnings before Wall Street opens.

Greek bank shares (.FTATBNK: ) fell 2.8 percent on worries
over the impact of widening yield spreads and austerity measures
on the weakening economy.

Energy stocks were under pressure, with crude (CLc1: ) hitting
a three-week low to fall below $82 a barrel as European flights
remained disrupted due to the ash cloud from the Icelandic
volcano, curbing jet fuel use.

BP (BP.L: ), BG Group (BG.L: ), Royal Dutch Shell (RDSa.L: ),
Total (TOTF.PA: ) and Cairn Energy (CNE.L: ) dipped 0.4 to 1
percent.

AIRLINES SLIP

Airlines and travel companies extended their sharp declines
from the previous session due to the widespread cancellation of
flights in Europe.

British Airways (BAY.L: ), Lufthansa (LHAG.DE: ), Iberia
(IBLA.MC: ), Ryanair (RYA.I: ), Aer Lingus Group (AERL.I: ), Air
France-KLM (AIRF.PA: ) and Finnair (FIA1S.HE: ) lost 2.7 to 7.7
percent.

TUI Travel (TT.L: ) and Thomas Cook (TCG.L: ) slipped 2.7 to 3.9
percent.

Food producers suffered from the volcano fallout as some of
their ingredients and output could not be transported to
intended destinations.

Nestle (NESN.VX: ), Parmalat (PLT.MI: ) and Danisco (DCO.CO: )
lost 1.4 to 2.8 percent.

“If the restrictions from the volcano rumble on through the
week then there might be more difficulties ahead, with supplies
not being able to get through,” said Wood-Smith. “There could be
food shortages.”

On the upside, Eurotunnel (GETP.PA: ) rose 2.7 percent, as
travellers sought alternative routes.

Among individual stocks, Dutch Philips Electronics (PHG.AS: )
gained 2.3 percent after it reported first-quarter operating
profit above the most optimistic forecast, driven by its
lighting unit and cost cuts. [ID:nLDE63I07O]

BT Group (BT.L: ) rose 1.4 percent after JPMorgan upgraded the
stock to “overweight” from “neutral” and said it sees
operational momentum as underappreciated and pension concerns
overdone.

Across Europe, the FTSE 100 (.FTSE: ) index was down 0.6
percent, Germany’s DAX (.GDAXI: ) fell 0.4 percent and France’s
CAC 40 (.FCHI: ) slipped 0.6 percent.
Investment Research

(Editing by David Holmes)

Banks, volcano woes drag down European shares