Europe shares slip

By Joanne Frearson

LONDON (BestGrowthStock) – European shares fell on Thursday morning, led by banking stocks, with Deutsche Bank (DBKGn.DE: ) and Santander (SAN.MC: ) down after results, but Vodafone (VOD.L: ) rose after it raised its outlook.

Investors are also awaiting the European Central Bank rate decision at 1245 GMT (7:45 a.m. EST) and the Bank of England decision at 1200 GMT (7 a.m. EST). Both are expected to keep rates unchanged.

By 0950 GMT (4:50 a.m. EST), the pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares was down 0.8 percent at 1,012.64 points.

“It is not surprising, the underlying trend is generated from the FX markets. If the dollar goes up then we see the unwinding of the carry trade and the selling of European assets. We can’t climb here in the equity markets,” said Giuseppe-Guido Amato, strategist at Lang & Schwarz in Frankfurt.

“Everyone was expecting good figures from Deutsche Bank. The results were not good enough to have an impact on the broader market.”

Banks took the most points off the index. Deutsche Bank (DBKGn.DE: ) fell 0.9 percent despite beating market forecasts to swing to a fourth quarter net profit of 1.3 billion euros ($1.8 billion).

Santander (SAN.MC: ), the euro zone’s biggest bank, lost 2.9 percent after traders pointed to concerns over the outlook for crisis-hit Spain and worries the bank is not doing enough to address its property exposure despite results beating forecasts.

Across Europe, the FTSE 100 (.FTSE: ) index and Germany’s DAX (.GDAXI: ) both slipped 0.7 percent, France’s CAC 40 (.FCHI: ) lost 0.8 percent and Spain’s IBEX 35 index (.IBEX: ) fell 2.6 percent.

Portugal’s leading stock index the PSI20 (.PSI20: ) fell 3.6 percent as the country’s bonds slumped on growing concerns over the budget deficit and growing debts, traders said.

The euro hit a seven-month low against the dollar, knocked by concerns over the fiscal health of peripheral euro zone countries Spain, Portugal and Greece.

ROYAL DUTCH SHELL SLIPS

Energy stocks featured among the worst performers. Royal Dutch Shell slipped 1.8 percent after it posted a 75 percent fall in fourth quarter profit (Read more your timing to make a profit.)s to $1.18 billion, as it was punished for its strong positions in the ailing natural gas and refining businesses.

Mining stocks were also in decline. Anglo American (AAL.L: ), Antofagasta (ANTO.L: ), BHP Billiton (BLT.L: ), Eurasian Natural Resources Corporation (ENRC.L: ), Rio Tinto (RIO.L: ) and Xstrata (XTA.L: ) were 1.9 to 4.3 percent lower.

Consumer goods group Unilever (ULVR.L: ) lost 2.7 percent after it beat fourth-quarter sales growth forecasts but its West European region stayed weak and the group needed to cut prices more than expected to get its overall sales growth.

On the upside, telecoms were in demand. Vodafone gained 4.1 percent after it raised its outlook after posting third-quarter revenue ahead of forecasts.

Swiss insurer Zurich Financial Services (ZURN.VX: ) rose 4.1 percent after it said it would reward shareholders with dividends above pre-crisis levels after it improved its capital position and increased profit in 2009.

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Europe shares slip