European shares down on profit taking, weak banks

* FTSEurofirst 300 falls after 6 mths high

* Financials slip; RBS sees market conditions challenging

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

By Atul Prakash

LONDON, Nov 5 (BestGrowthStock) – European shares drifted lower in
early trade on Friday as investors took profits from six-month
high equity prices ahead of widely-watched U.S. nonfarm payroll
numbers, with financials featuring among top decliners.

Royal Bank of Scotland (RBS.L: ) fell 2.2 percent as it
expected challenging market conditions in the fourth quarter and
said a UK bank tax would add up to 250 million pounds to its
costs next year. [ID:nLDE6A31SL]

At 0949 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was down 0.2 percent at 1,104.52 points after
rising to 1,111.02, the highest since mid-April. It surged 1.7
percent on Thursday on the U.S. Federal Reserve’s decision to
buy $600 billion in government bonds to help the U.S. economy.

Investors eagerly awaited the U.S. employment report for
October, due at 1230 GMT, for near-term guidance.

“Expectations are for non-farm payroll numbers to come in
around 60,000, the first increase since May. But, this is not
likely to be enough to reduce the unemployment rate,” said Manoj
Ladwa, senior trader at ETX Capital.

“Unless the figure is strongly above expectations, the
market could come in for a small bout of profit-taking as
traders square their books going into the weekend.”

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a preview of nonfarm and private payrolls, click on: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Financials featured among the top losers, with the STOXX
Europe 600 banking index (.SX7P: ) down 1.3 percent. HSBC (HSBA.L: )
fell 2.1 percent as investors took profits after strong rally in
recent sessions. The bank said on Friday its third quarter and
year-to-date profits were “well ahead” of a year ago.

Credit Agricole (CAGR.PA: ), Bankininter (BKT.MC: ) and Bank of
Ireland (BKIR.I: ) fell 2.4 to 4.9 percent.

Across Europe, the FTSE 100 (.FTSE: ), Germany’s DAX (.GDAXI: )
and France’s CAC 40 (.FCHI: ) fell 0.1 to 0.2 percent. The Thomson
Reuters Peripheral Eurozone Countries Index (.TRXFLDPIPU: ) was
down 1.8 percent, while Irish shares (.ISEQ: ) fell 1.2 percent.

Ireland’s Department of Finance declined to comment on a
newspaper report saying the government would delay publication
of its four-year fiscal plan until after a by-election for a
vacant parliamentary seat on Nov. 25. [ID:nLDE67O1AJ]

Meanwhile, some analysts said the Fed’s further stimulus
measures had set the ground for the stock market to go higher in
the remaining months of the year.

“One has to feel a sense of reservation about what’s going
on, but you can’t ignore momentum, which just seems to be one
way at the moment,” said Mike Lenhoff, chief strategist at
Brewin Dolphin.

“The bad news could be ignored in the short term. The view
is that here is a central bank that is prepared once again to
ensure that the economy does not relapse into recession.”

Among individual movers, the world’s largest cement maker
Lafarge (LAFP.PA: ) fell 2 percent after posting
lower-than-expected third-quarter results due to rising
production costs. [ID:nLDE6A31U7]

Mobile phone retailer Carphone Warehouse (CPW.L: ) jumped 6.5
percent as it raised its earnings forecast and pledged to pay
its first dividend, saying strong U.S. growth and demand for
smartphones would offset extra investment in its UK megastores.
(Graphics by Scott Barber; Editing by Hans Peters)

European shares down on profit taking, weak banks