Europe shares slip, concern about size of Fed’s QE

* FTSEurofirst 300 index slips 0.1 percent

* Miners higher on China manufacturing data

* Serco drops on UK govt reprimand
* For up-to-the-minute market news, click on [STXNEWS/EU]

By Joanne Frearson

LONDON, Nov 1 (BestGrowthStock) – European shares edged lower on
Monday, reversing earlier gains as investors took a cautious
stance ahead of Wednesday’s announcement on U.S. monetary
policy, with risk-sensitive banks the major fallers.

Losses were limited as the market got some support from the
mining sector after strong Chinese data showed good demand for
metals. Xstrata (XTA.L: ), Kazakhmys (KAZ.L: ) and Lonmin (LMI.L: )
gained 1.2 to 2.4 percent.

By 1242 GMT, the pan-European FTSEurofirst (.FTEU3: ) index of
top shares was down 0.1 percent at 1,085.60 points after being
as high as 1,094.74.

“Stocks initially benefitted from the Chinese manufacturing
data,” Heino Ruland, strategist at Ruland Research in Frankfurt,
said.

“But the market was a lot stronger than anticipated, and
investors are now taking profits ahead of the Federal Open
Monetary Committee announcement on Wednesday.”

Though there is little question in investors’ minds the U.S.
Federal Reserve will announce more quantitative easing, there is
concern about how much it will commit to. [ID:nLDE69S0EN]

The risk is that the Fed’s actions will not justify the huge
investment plays put in place in the run-up to the meeting.

Banks, sensitive to changes in the economic environment,
featured among the worst performers. Banco Santander (SAN.MC: ),
Societe Generale (SOGN.PA: ) and BNP Paribas (BNPP.PA: ) fell 0.7 to
2.1 percent.

SERCO HUMBLED

Public services provider Serco Group (SRP.L: ) fell 6.4
percent as it apologised on Monday for upsetting the British
government by demanding that suppliers cough up in support of
Whitehall’s austerity drive. [ID:nLDE6A00F6]

“The revelations over the weekend of the group’s “brutal”
letter to suppliers, and its subsequent withdrawal, suggests
some reputational damage to the group,” Numis said in a note.

Europe’s largest low-cost airline, Ryanair (RYA.I: ) (RYA.L: ),
slipped 3.6 percent. It failed to wow investors with an upgrade
to its full-year earnings forecast after missing market
forecasts for second-quarter net profit. [ID:nLDE6A0035]

Mail and express group TNT (TNT.AS: ) fell 3.4 percent after
the Dutch company posted worse-than-expected results, dragged
down by restructuring, pension and other costs in its mail unit.

Back to the upside, Bayer (BAYGn.DE: ) rose 2.8 percent after
preliminary study results shortened the odds against its new
stroke-prevention drug entering the $12 billion-plus market.
[ID:nLDE6A00DQ]

Telenor (TEL.OL: ) gained 2.6 percent after Barclays Capital
upgraded the Norwegian telecommunications company to
“overweight” from “equal weight”.

Across Europe, Britain’s FTSE 100 (.FTSE: ) was flat,
Germany’s DAX (.GDAXI: ) rose 0.2 percent and France’s CAC 40
(.FCHI: ) slipped 0.3 percent.

Portugal’s PSI 20 index (.PSI20: ) gained 0.8 percent after
the minority Socialist government and opposition Social
Democrats (PSD) reached agreement on the 2011 budget on
Saturday, averting a political crisis in one of the euro zone’s
financially weakest members. [ID:nLDE6A009F]

(Editing by David Hulmes)

Europe shares slip, concern about size of Fed’s QE