Europe stocks end lower on U.S. data; ECB reassures

* FTSEurofirst 300 ends down 0.2 pct; lost 7.9 pct in Q2

* Poor U.S. ADP figures raise fears over Friday’s payrolls

* Banks borrow less than expected, soothing funding jitters

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

By Blaise Robinson

PARIS, June 30 (BestGrowthStock) – European shares fell 0.2 percent
on Wednesday, closing a torrid quarter with a loss of 7.9
percent as poor U.S. jobs data from the private sector fuelled
fears about the pace of the U.S. economic recovery.

Wednesday’s retreat was limited, however, as banking stocks
rallied after results of the European Central Bank’s lending
operation showed banks borrowed less money than expected,
soothing worries over funding in the euro zone.

The FTSEurofirst 300 (.FTEU3: ) index of top European shares
ended down 0.2 percent at a 3-week closing low of 993.49 points,
retreating for the sixth time in seven sessions.

The ADP Employer Services report — seen as a harbinger for
all-important U.S. monthly non-farm payrolls data due on Friday
— showed U.S. private employers added 13,000 jobs in June,
while the median of estimates from 30 economists surveyed by
Reuters was for a rise of 60,000.
“The ADP figure suggests that the private sector is
struggling to keep up with the pace of job creation we have seen
over the past few months. But the concern is more on the pace of
the economic recovery rather than on the risk of a return to
recession,” said Jean-Marc Lucas, economist at BNP Paribas in
Paris.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on price return:
http://graphics.thomsonreuters.com/10/GLB_PRH1.html
For a graphic on total return:
http://graphics.thomsonreuters.com/10/GLB_ASH1.html
For a graphic on Reuters June Asset Allocation Poll:
http://graphics.thomsonreuters.com/10/GLB_AAPL0610.gif
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Cyclical mining shares were among the worst hit, with Rio
Tinto (RIO.L: ) down 2.6 percent and Xstrata (XTA.L: ) down 2.4
percent.

Moving into the opposite direction, AstraZeneca (AZN.L: )
jumped 7.5 percent after a U.S. judge ruled that the patent on
its blockbuster cholesterol fighter Crestor was valid, handing
the drugmaker a big victory.

Oil major BP (BP.L: ) rose 5.3 percent, recouping a tiny
portion of the stock’s losses suffered since the Gulf of Mexico
oil spill started in mid-April, with traders citing speculation
of a takeover bid for the beleaguered company as well as short
covering.

Recently-hammered banks gained ground, with Banco Santander
(SAN.MC: ) rising 3.5 percent, Credit Agricole (CAGR.PA: ) gaining
3.4 percent and Deutsche Bank (DBKGn.DE: ) adding 1.5 percent.

Results from the ECB funding operation showed banks borrowed
less than expected, easing concerns over their ability to cope
with the repayment of nearly half a trillion euros in 12-month
funds on Thursday.

WORST QUARTER SINCE EARLY 2009

The ECB said 171 banks borrowed 131.9 billion euros ($161.4
billion) over three months at a flat rate of 1 percent, below
expectations in a Reuters poll for demand of 210 billion euros.
[ID:nLDE65T0VB]

“This clearly removes some of the tension on the market, but
the reality check for the banks will be the stress tests, with
the results due later this month,” said David Thebault, head of
quantitative sales trading, at Global Equities.

The FTSEurofirst 300 index ended the torrid second quarter
with a loss of 7.9 percent, its worst quarterly performance
since the first quarter of 2009, as rising fears over sovereign
debt problems in the euro zone prompted investors to shun risky
assets such as equities and sell the euro currency.

But Pascal Blanque, chief investment officer at Amundi Asset
Management, said investor sentiment might be too pessimistic,
creating good opportunities in the equities and credit markets.

“People are underestimating three things: The impact of a
lower euro for companies, the fact that these companies are
global, and the resilience of the European economy where
households’ debt level is not a worry, except in Spain.”

The recent pullback on the market has dragged European stock
valuations to levels not seen in nearly a year.

The average price-to-earnings (P/E) ratio of shares in the
broad STOXX 600 index (.STOXX: ) is 12.1. This compares with a
current P/E ratio of 15 for Wall Street’s S&P 500 index (.SPX: ).

Stock Market

(Reporting by Blaise Robinson; editing by Simon Jessop)

Europe stocks end lower on U.S. data; ECB reassures