Weak pharmas pressure Europe shares; Greek banks up

* FTSEurofirst 300 index down 0.6 pct

* Drugmakers reverse previous gains

* Greek banks spurred by euro zone agreement

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

By Harpreet Bhal

LONDON, March 26 (BestGrowthStock) – European shares were lower by
Friday midday, slipping from an 18-month closing high, with
drugmakers reversing earlier gains, while Greek banks rose as a
financial safety net plan for the debt-laden country provided
some relief.

By 1152 GMT, the FTSEurofirst 300 (.FTEU3: ) index of leading
European shares was down 0.6 percent at 1,077.28 points,
retreating from its highest close since early October 2008 hit
in the previous session.

Pharmaceutical stocks were among the biggest sector drag,
reversing modest gains in the previous session, with
GlaxoSmithKline (GSK.L: ), AstraZeneca (AZN.L: ), Sanofi-Aventis
(SASY.PA: ) and Novartis (NOVN.VX: ) off 0.7 to 1 percent.

On the upside, Greek lenders (.FTATBNK: ) surged 6.8 percent,
encouraged by an agreement by euro zone leaders for a package
for Greece under which Athens would receive both bilateral loans
from euro zone partners and International Monetary Fund funding
if it faced severe difficulties. [ID:nLDE62N2R1]

Among Greek banks, Alpha Bank (ACBr.AT: ) and National Bank of
Greece (NBGr.AT: ) rose 8.7 and 7.2 percent respectively,

Some concerns, however, lingered over how the debt burden
would be managed in practice and worries over the fiscal health
of other euro zone peripheral countries, pressuring the wider
banking sector.

The broader banking sector was mixed, with Societe Generale
(SOGN.PA: ), BNP Paribas (BNPP.PA: ) and Deutsche Bank (DBKGn.DE: ) up
0.1 to 0.7 percent while HSBC (HSBA.L: ), Commerzbank (CBKG.DE: ),
Lloyds Banking Group (LLOY.L: ) and Nordea (NDA.ST: ) were down 0.2
to 3.8 percent.

“The Greek economy is going to be in recession at best and
depression at worst for a very long time … and the concern is
that this may potentially spread to the other areas of southern
Europe perceived to have high debt to GDP ratios,” said Jeremy
Batstone-Carr, head of private client research at Charles
Stanley.

The pan-European index is on track to rise 1.2 percent this
week, the fourth straight week of gains, and is up 3.1 percent
so far this year after rebounding around 67 percent since
hitting a record low in March last year.

CORRECTION DUE

Analysts said a correction may be due as equities become
fully valued and the risk of higher interest rates intensify.

“Investors may be happy at paying a perceived 30 percent
premium to long-term price-to-earnings averages which is where
we believe the equity markets currently stand,” Batstone-Carr
said.

“But they have to accept the risks of so doing particularly
in an environment in which bond yields have risen… because
real interest rates have risen. Higher real interest rates is a
big negative for financial markets,” he said.

Cable & Wireless Communications (CWC.L: ) shed 1.2 percent
after prices were adjusted for the demerger of Cable & Wireless
Worldwide (CWP.L: ), which was marked up 27.5 percent.

Across Europe, the FTSE 100 (.FTSE: ), Germany’s DAX (.GDAXI: )
and France’s CAC 40 (.FCHI: ) shed 0.1 to 0.3 percent.

Among individual movers, Spain’s Abertis (ABE.MC: ) fell 3.2
percent on news one of its savings bank shareholders, CAM, has
sold 1.7 percent of the infrastructure firm through a placement
with Credit Suisse at 14.25 euros per share.

Investor focus later in the session is likely to turn to the
final reading for fourth-quarter real GDP, due at 1230 GMT,
followed by the final March University of Michigan consumer
sentiment survey at 1355 GMT.

Stock Market Research

(Editing by Erica Billingham)

Weak pharmas pressure Europe shares; Greek banks up