European shares close flat

By Harpreet Bhal

LONDON (BestGrowthStock) – European shares closed flat on Monday, with banks paring some earlier losses as worries over Greece eased, while drugmakers largely gained after the United States passed a healthcare bill which provided clarity for the sector.

The FTSEurofirst 300 (.FTEU3: ) index of top European shares closed flat at 1,065.16 points after having traded as low as 1,052.04 points.

Banks were among the biggest fallers, but shaved losses from earlier in the session. Some uncertainty over European Union aid for debt-stricken Greece weighed on sentiment but analysts said most of the concerns had largely been factored into the market.

Barclays (BARC.L: ), HSBC (HSBA.L: ), BNP Paribas (BNPP.PA: ) and Deutsche Bank (DBKGn.DE: ) were down between 0.2 and 1.1 percent, while Greek banks (.FTATBNK: ) slid 2.1 percent.

At the weekend, European leaders sent out conflicting signals over aid to Greece, with Germany’s Angela Merkel urging Athens to solve its debt problems alone and Italy’s Silvio Berlusconi strongly backing European Union support.

“There is still a degree of concern about Greece but because it has been around for so long it has been priced into sentiment in the market unless something dramatic happens,” said Joshua Raymond, market strategist at City Index.

The dollar gave back some of its previous gains, as the euro hit session highs against the U.S. currency, lifting commodity prices off their lows.

“The dollar has pared its gains and (as a result) we’re not seeing as much weakness in copper and crude prices, so the miners have seen a bit of buying back,” Raymond said.

Mining companies were higher, with Anglo American (AAL.L: ), BHP Billiton (BLT.L: ) Rio Tinto (RIO.L: ) and Antofagasta (ANTO.L: ) up 0.3 to 1.6 percent.

Among other sector risers, defensive food producers gained favor, with Nestle (NESN.VX: ), Associated British Foods (ABF.L: ) and Lindt & Spruengli (LISN.S: ) up 0.3 to 1.4 percent.

PHARMAS RISE

The U.S. House of Representatives approved a sweeping healthcare reform which will extend insurance coverage to nearly all Americans, expand the government health plan for the poor, impose new taxes on the wealthy and bar insurance practices such as refusing to cover people with pre-existing medical conditions.

“It’s down to people wanting to accept good news about the healthcare bill … provided the drug companies and the insurance companies don’t get mutilated,” said David Buik, senior partner at BGC Partners.

Drugmakers largely gained, reversing earlier losses. GlaxoSmithKline (GSK.L: ), AstraZeneca (AZN.L: ), Shire (SHP.L: ) and Merck (MRCG.DE: ) added 0.1 to 1 percent.

Healthcare equipment and services firms also rose, with Fresenius Medical Care (FMEG.DE: ), Smith & Nephew (SN.L: ) and Sonova (SOON.VX: ) up 1.3 to 3.2 percent.

A surprise rate hike by India on Friday also put some pressure on the equity market. The move, along with recent steps by China to cool its economy, raised concern over a pullback in loose monetary policy.

“It shows that in some areas of the world central banks are starting to tighten monetary policy and this creates some nervousness regarding the medium term impact on the economic growth backdrop for equities,” said Tammo Greetfeld, equity strategist at Unicredit in Munich.

Across Europe, Britain’s FTSE 100 (.FTSE: ) eased 0.1 percent, while Germany’s DAX (.GDAXI: ) and France’s CAC 40 (.FCHI: ) rose 0.1 percent.

Stock Market Today

(Editing by David Cowell)

European shares close flat