European shares slip as miners, banks fall

* FTSEurofirst 300 index down 0.5 pct

* Vedanta Resources drops on Cairn India news

* Delhaize falls as cuts outlook

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

By Joanne Frearson

LONDON, Aug 13 (BestGrowthStock) – European shares fell on Friday as
miners reversed earlier gains, with Vedanta Resources (VED.L: )
dropping after sources said it is to buy Cairn India (CAIL.BO: ),
and investors remained wary about global economic growth.

By 1118 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index of top shares was down 0.5 percent at 1,037.54 points
after being up as much as 1,050.65 earlier. The index is on
track to post a 1.9 percent decline this week.

The market was initially boosted after German gross domestic
product grew 2.2 percent in the second quarter, while French GDP
growth also exceeded forecasts. [ID:nLDE67B1IT] [ID:nLDE67C0DK]

“The German GDP data had the market in ridiculous euphoria
this morning, but looking forward GDP is likely to contract with
austerity programmes,” said David Buik, a senior partner at BGC

Miners which initially had been boosted by the strong GDP
data reversed earlier gains. Vedanta Resources (VED.L: ) dropped 5
percent after a source close to the matter said the miner is
close to finalising a deal to buy a majority stake in Cairn
Energy’s (CNE.L: ) Indian unit, Cairn India (CAIL.BO: ).

Antofagasta (ANTO.L: ), Eurasian Natural Resources Corporation
(ENRC.L: ) and Xstrata (XTA.L: ) slipped 0.9 to 1.3 percent.

Also weighing on investor sentiment was news that Italy’s
bond sale of its 2015 and 2025 BTPs drew lower bid/cover ratios
compared with the previous sales in July and May respectively.

“There are still underlying debt problems, in the Italian
bond auctions the bid cover/ratios were disappointing,” said
Giuseppe-Guido Amato, Lang & Schwarz strategist. “Earning season
is now flattening out and equities have not got the momentum to
break to the upside.”

The Euro STOXX 50 (.STOXX50E: ), the euro zone’s blue-chip
index, was 0.8 percent lower at 2,698.09 points, under its
50-percent Fibonacci retracement at 2,738 of a fall from a high
in April to a low in May, generally a bearish signal.

The Thomson Reuters Peripheral Eurozone Countries Index
(.TRXFLDPIPU: ) fell 1.2 percent.


Banking shares continued their decline from the previous
session, with the STOXX Europe 600 Banks (.SX7P: ) index down 1.4
percent. HSBC (HSBA.L: ), Standard Chartered (STAN.L: ) and BNP
Paribas (BNPP.PA: ) slipped 1.6 to 2 percent.

Elsewhere, Delhaize (DELB.BR: ) dropped 8.1 percent after the
Belgian supermarket group cut it 2010 outlook. [ID:nLDE67A0YB]

On the upside, TUI Travel (TT.L: ) gained 3.7 percent after
Goldman Sachs raised its recommendation on both companies to
“buy” from “neutral”.

Aviva (AV.L: ) rose 4.1 percent following a report that the
insurer had rejected a 5 billion sterling offer from RSA. Aviva
declined to comment on the report.

U.S. CPI figures and retail sales are due at 1230 GMT.

“We are worried about how good or bad retail sales are in
the United States, if it is not great we are not going to the
end the day in positive territory,” said Buik.

Across Europe, the FTSE 100 (.FTSE: ) index was down 0.5
percent, Germany’s DAX (.GDAXI: ) was 0.7 percent lower and
France’s CAC 40 (.FCHI: ) was down 0.9 percent.
(Reporting by Joanne Frearson; Editing by Erica Billingham)

European shares slip as miners, banks fall