Growth worries drag European shares to 1-month low

By Joanne Frearson

LONDON (BestGrowthStock) – European shares fell to their lowest close in a month on Friday, below a key resistance level, as worries about global economic growth weighed on sentiment, with construction stocks among the worst performers.

Construction stocks continued their slide from Thursday’s session when Holcim (HOLN.VX: ), the world’s second-biggest cement maker, posted disappointing first-half earnings. Holcim, Saint-Gobain (SGOB.PA: ) and HeidelbergCement (HEIG.DE: ) slipped 2.1 to 2.6 percent.

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares ended down 0.7 percent at 1,029.59 points.

The Euro STOXX 50 (.STOXX50E: ), the euro zone’s blue chip index, was down 1.2 percent at 2,643.98 points, piercing a key support level, the 38.2 percent retracement of the index’s fall from a high in April to a low in May.

“We are having another one of those bad days,” said Peter Dixon, economist at Commerzbank. “In thin trade investors are looking at the numbers coming out of the U.S. in recent days and are concerned that a double dip is on the horizon.”

U.S. stocks (Read more about the stock market today. ) tumbled to their lowest close in nearly a month on Thursday after anemic labor market and regional manufacturing reports indicated the economy was slowing.

FINANCIALS WEIGH

Financials were also among the worst performers as investors sold out of perceived riskier asset classes on growth worries.

Insurers Aegon (AEGN.AS: ), Prudential (PRU.L: ) and Axa (AXAF.PA: ) fell 2.2 to 3.2 percent, while banks UBS (UBSN.VX: ), Royal Bank of Scotland (RBS.L: ) and Credit Agricole (CAGR.PA: ) fell 1.9 to 2.5 percent.

“The market is falling on concerns about GDP growth,” said Dean Tenerelli, fund manager at T Rowe Price. “It’s about the effect of a U.S. slowdown and uncertainty and how earnings will look in 2011, when austerity kicks in, though in general, results have been good.”

However, BG Group (BG.L: ), bucked the trend and gained 6 percent, following a report of a possible 54 billion pound ($84 billion) bid for the company, of which analysts were generally dismissive.

The Daily Mail newspaper reported rumors that oil major Royal Dutch Shell (RDSa.L: ) was considering a 1,600 pence per share cash bid for BG.

Both companies declined to comment on the rumor.

Dana Petroleum (DNX.L: ) rose 6.1 percent after state-run Korea National Oil Corp (KNOC) made a hostile bid for the company.

Across Europe, the FTSE 100 (.FTSE: ) index was down 0.3 percent, Germany’s DAX (.GDAXI: ) was 1.2 percent lower and France’s CAC 40 (.FCHI: ) was down 1.3 percent.

The Thomson Reuters Peripheral Eurozone Countries Index (.TRXFLDPIPU: ) fell 2.4 percent.

(Additional reporting by Brian Gorman; Editing by Louise Heavens)

Growth worries drag European shares to 1-month low