European shares end slightly lower

By Joanne Frearson

LONDON (BestGrowthStock) – European shares ended slightly lower on Monday as concerns about the global economic recovery weighed on investor sentiment, outweighing support from merger and acquisition news.

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares closed down 0.1 percent at 1,025.48 points. Trading was thin with the British markets closed for a holiday. Volumes on the index were at just 50.1 percent of its 90-day average.

“Volumes have been very light on the back of the UK bank holiday, interest has been limited with the main focus on M&A,” said Matthew Brown, sales trader at ETX Capital.

“Sanofi has put in a bid for Genzyme and clients have been trading around the pharmaceutical names.”

Pharma shares featured among the best performers, with French drugmaker Sanofi-Aventis (SASY.PA: ) up 0.7 percent. U.S.-based Genzyme Corp (GENZ.O: ) rejected an $18.5 billion takeover offer from the drugmaker saying it dramatically undervalued the company.

Other merger and acquisition activity helped support the European markets. Zodiac (ZODC.PA: ) surged 10.5 percent following a report in French newspaper La Tribune that French conglomerate Safran (SAF.PA: ) was set to launch an offer for the French aerospace parts maker with a rich premium.

Safran denied the newspaper report and Zodiac had no comment.

Pizza-to-aluminum conglomerate, Orkla (ORK.OL: ) rose 4.4 percent after South Korean company POSCO (005490.KS: ) said it was considering a takeover of Elkem, a Norwegian maker of silicon for solar panels. Elkem is owned by Orkla.

BANKS MIXED

Irish banks were mixed, with Allied Irish Banks (ALBK.I: ) rising 2.5 percent and Bank of Ireland (BKIR.I: ) down 1.1 percent.

Ireland’s government signaled on Monday that gradually winding down Anglo Irish Bank (ANGIB.UL: ) could be an option as political pressure mounts on Prime Minister Brian Cowen to deal with a national millstone.

On the downside, Germany’s Infineon (IFXGn.DE: ) fell 3.7 percent on news that Intel (INTC.O: ) will buy the chipmaker’s wireless unit for $1.4 billion.

Comments by U.S. Federal Reserve Chairman Ben Bernanke on Friday that it stood ready to act if needed to spur slowing growth had also provided support to the market in early trading, but negative market sentiment limited gains.

“That sounds (like) desperation,” said Koen De Leus, economist at KBC Securities, referring to Bernanke’s comment.

“I don’t see any comfort in these words. They have done everything to save the economy, but it is faltering again. The U.S. data are going to be disappointing and the stock market is likely to head lower in the next one to two months because of grim economic outlook.”

U.S. President Barack Obama said on Sunday the U.S. economy was expanding, but not quickly enough, and there was no “magic bullet” to fix its problems.

Across Europe, Germany’s DAX (.GDAXI: ) was 0.7 percent lower and France’s CAC 40 (.FCHI: ) was down 0.6 percent.

(Additional reporting by Atul Prakash; Editing by Erica Billingham)

European shares end slightly lower