European shares slip on worries in banking sector

* FTSEurofirst 300 down 0.2 pct, slips from 5-month highs

* Banks slip on capital requirement concerns

* Miners among the gainers as weak dollar boosts metals

By Harpreet Bhal

LONDON, Oct 14 (BestGrowthStock) – European shares slipped on
Thursday, with banks pressured by ongoing capital worries and
mirroring weak U.S. lenders, after a mortgage industry probe
raised fresh concerns about the sector’s recovery.

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top
shares closed 0.2 percent lower at 1,084.67 points in a choppy
session, after earlier trading at a five-month intraday high of
1,094.13 points.

Banks were weak after Standard Chartered’s (STAN.L: ) launch
of a $5.3 billion rights issue to shore up its finances sparked
concerns other lenders would have to follow suit to meet fresh
capital requirements. Barclays (BARC.L: ), Societe Generale
(SOGN.PA: ) and BNP Paribas (BNPP.PA: ) fell 3.1 to 4.1 percent.

The sector was also weighed down by falls in U.S. lenders
after all 50 U.S. states launched a joint investigation of the
mortgage industry — a move that could threaten the recovery of
the housing market. [ID:nN13211357]

“There is news out of the U.S. on investigations into home
foreclosures. That’s causing some uncertainty for the banks,” a
London-based trader said.

Further losses were limited as heavyweight mining shares
pushed higher, with the STOXX Europe 600 basic resources index
(.SXPP: ) up 0.9 percent, boosted by firm metals prices as the
dollar continued to weaken on expectations the U.S. Federal
Reserve would increase asset purchases to bolster the recovery.

The technical picture signalled a bullish trend as the
blue-chip Euro STOXX 50 (.STOXX50E: ) stayed above a key
resistance of 2,740.32, its 61.8 percent retracement of an April
high to a May low for the second day in a row.

“Technical outlook is good because we have buy signals after
a sideways movement during the last six months. There is high
momentum to the upside,” said Achim Matzke, technical strategist
at Commerzbank in Frankfurt.

Across Europe, Britain’s FTSE 100 (.FTSE: ) and France’s CAC
40 (.FCHI: ) fell 0.4 and 0.2 percent, respectively, while
Germany’s DAX (.GDAXI: ) rose 0.3 percent.

EARNINGS IN FOCUS

Investors are likely to look to further corporate earnings
in the United States for direction, with Google (GOOG.O: )
reporting quarterly figures after U.S. markets closed on
Thursday and General Electric (GE.N: ) releasing figures on
Friday.

“Equities are not looking desperately overpriced at the
moment. For the next two to three weeks it is the earnings
season that is going to fuel the equity market,” said Lothar
Mentel, chief investment officer at Octopus Investments.

Among individual movers, Actelion (ATLN.VX: ) rose 6.6 percent
on renewed market talk the Swiss biotech group could be the next
bid target in the pharmaceuticals sector. [ID:nLDE69D23W]

Heavyweight Vodafone (VOD.L: ) rose 1.6 percent following an
upgrade from Nomura, which cited strong costs reduction.

On the downside, Belgian supermarket group Delhaize
(DELB.BR: ) fell 4.7 percent after a downbeat note by brokers
Deutsche Bank, which cut the firm’s target price.
(Additional reporting by Atul Prakash; Editing by Karen Foster)

European shares slip on worries in banking sector