European shares retreat; growth concerns weigh

* FTSEurofirst 300 falls 0.6 pct after 2 session of gains

* Financials, oils among top decliners on growth worries

* Hochtief jumps 5.4 percent after raising 2010 outlook

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

By Atul Prakash

LONDON, Aug 16 (BestGrowthStock) – European shares slipped on Monday
after two straight session of gains, led lower by financials, as
the latest figures showing Japan’s economic growth slowed
sharply in April-June raised concerns about the global recovery.

Japan’s quarterly gross domestic product growth of 0.1
percent translates to annualised expansion of 0.4 percent, well
below the median market forecast of 2.3 percent and the United
States’ 2.4 percent annualised growth in the same quarter.

Analysts see more weakness in the Japanese economy ahead.
The figures came just days after a darker assessment of the U.S.
economy by the Federal Reserve.

At 0902 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was down 0.6 percent at 1,038.92 points after
rising to a high of 1,051.24 earlier in the session. The market
remained choppy because of thin volumes in the holiday season.

The volume on the European index was 14 percent of its
90-day daily average.

“What has been driving sentiment for a little while now has
been this concern about the loss of momentum in the global
recovery. The GDP figures out of Japan this morning clearly
didn’t help,” said Mike Lenhoff, chief strategist at Brewin
Dolphin.

“For the balance of the month, we are probably not going to
go anywhere. The earnings season was very good but it’s behind
us now.”

Financial stocks were among the top losers, with the STOXX
Europe 600 banking index (.SX7P: ) falling 1.2 percent on worries
slower economic growth will hurt banking operations. Standard
Chartered (STAN.L: ), Royal Bank of Scotland (RBS.L: ), BNP Paribas
(BNPP.PA: ) and Credit Agricole (CAGR.PA: ) fell 0.7 to 1.9 percent.

OILS DOWN, HOCHTIEF JUMPS

Energy shares also lost ground on concerns that energy
demand in the U.S. will suffer. BP (BP.L: ), Royal Dutch
Shell (RDSa.L: ), BG Group (BG.L: ), Tullow Oil (TLW.L: ), Repsol
(REP.MC: ) and Total (TOTF.PA: ) shed 0.4 to 2.1 percent.

“There is nothing to cheer about. Economic figures,
certainly in the United States, are really disappointing and
pointing towards going more and more close to a double dip,”
said Koen De Leus, economist at KBC Securities.

“This time, it doesn’t hurt to be a little bit cautious.”

Investors wait for more macroeconomic numbers from the U.S.
this week, including industrial production, housing starts and
inflation, for short-term market direction.

Miners also tracked the broader market weakness. The STOXX
Europe basic resources index (.SXPP: ) fell 0.3 percent, while
steel giant Arcelor Mittal (ISPA.AS: ), Lonmin (LMI.L: ) and Rio
Tinto (RIO.L: ) fell 0.1 to 0.6 percent.

But some analysts were positive on the sector’s outlook.

“While the market appears to be struggling to see beyond the
near-term slowing of China and ex China, we believe evidence
that China has bottomed will be the next catalyst for the
outperformance of the miners,” Credit Suisse said in a note.

Across Europe, the FTSE 100 (.FTSE: ), Germany’s DAX (.GDAXI: )
and France’s CAC 40 (.FCHI: ) fell 0.4 to 0.9 percent.

On the positive side, Hochtief (HOTG.DE: ), Germany’s biggest
construction company, jumped 5.4 percent after it raised its
2010 outlook for new orders and order backlog after receiving
several large contracts in Australia in the second quarter.
[ID:nLDE67F02J]

So far this earnings period, some 75 percent of results from
Standard & Poor’s 500 (.SPX: ) companies have beaten earnings
forecast, according to Thomson Reuters estimates.

The Euro STOXX 50 (.STOXX50E: ), the euro zone’s blue chip
index, was down 0.8 percent at 2,686.56 points. The index might
find support at 2,669 — the 38.2 percent retracement of a fall
from a high in April to a low in May.
(Editing by Sharon Lindores)

European shares retreat; growth concerns weigh