Oils, banks lead European shares lower

By Brian Gorman

LONDON (BestGrowthStock) – European shares fell on Tuesday, with energy companies sliding after sharp falls in the crude price and banking stocks down as investors grew cautious ahead of corporate earnings from the United States.

However, luxury goods retailers and spirits companies gained after strong sales from LVMH (LVMH.PA: ).

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares fell 0.3 percent to close at 1,098.56 points, having moved in a range of 7.89 points during the session, between a high of 1,102.76 and a low of 1,094.87.

The European benchmark is up more than 70 percent from its lifetime low of March 9, 2009.

U.S. crude oil futures fell more than 2 percent at one stage, pushing lower for a fifth consecutive session, weighed down by expectations that inventory reports will show stockpiles rose again last week.

Energy producers to fall included Total (TOTF.PA: ), ENI (ENI.MI: ), BG (BG.L: ) and StatoilHydro (STL.OL: ), down between 0.6 and 1.8 percent.

Rio Tinto (RIO.L: ) and BHP Billiton (BLT.L: ), down 1.6 and 1.2 percent respectively, were among miners to fall, as some metals prices slipped.

Analysts said investors were wary ahead of key first-quarter earnings statements from the likes of Intel (INTC.O: ), due after the market closes on Tuesday.

“We’re just starting the U.S. earnings season and it may be that the market wants to see the lie of the land,” said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities in London.

“It looks as if the momentum that had been carrying the markets forward has been drained a little.”

Traders also pointed to speculation that the U.S. Federal Reserve may be on the verge of changing the wording of its guidance on interest rates, which have been kept near zero, as early as tomorrow’s testimony by chairman Bernanke before the Joint Economic Committee of Congress.

Lenhoff said: “The market might get carried away with the (Bernanke) rumor, but it’s important to wait to see what he says.”

Across Europe, Britain’s FTSE 100 (.FTSE: ), Germany’s DAX (.GDAXI: ) and France’s CAC 40 (.FCHI: ) ended the day between 0.3 and 0.5 percent lower.

Wall Street was lower around the time European bourses were closing. The Dow Jones (.DJI: ), S&P 500 (.SPX: ) and Nasdaq Composite (.IXIC: ) were down between 0.3 and 0.5 percent.

Aluminum producer Alcoa Inc (AA.N: ) fell 3.2 percent, having kicked off the earnings season late on Monday by posting its fifth net loss in the past six quarters.


Greek banks (.FTATBNK: ) fell 4.2 percent, following sharp gains in the previous two sessions, when they rose on relief that a bailout mechanism was in place for debt-laden Greece.

Other banks to fall included BNP Paribas (BNPP.PA: ),

Deutsche Bank (DBKGn.DE: ), Lloyds (LLOY.L: ), and UBS (UBSN.VX: ), down between 0.8 and 1.4 percent, as investors awaited results from key U.S. peers this week, including JPMorgan (JPM.N: ) and Bank of America.

Figures from General Electric (GE.N: ) will also give a gauge on the pace of recovery in the world’s largest economy.

On the upside, luxury goods retailers were buoyed by strong results by LVMH, which rose 1.4 percent after reporting forecast-beating sales growth for the first quarter.

Within the sector, Christian Dior (DIOR.PA: ) rose 1 percent.

Spirits groups Pernod Ricard (PERP.PA: ) and Diageo (DGE.L: ) gained 2.7 and 1.8 percent respectively, boosted by strong sales figures at LVMH’s wine and spirits division.

Shares in UK retail chains gained after the British Retail Consortium said sales jumped at their fastest pace in a year in March.

Kingfisher (KGF.L: ) gained 2.7 percent, while heavyweight Tesco (TSCO.L: ) rose 1.4 percent to its highest close in more than two years, ahead of results on April 20.

Swedish truck maker Scania (SCVb.ST: ) rose 6.8 pecent after forecast-beating first-quarter results.

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(Editing by David Holmes)

Oils, banks lead European shares lower