By Amanda Cooper
LONDON, March 6 (Reuters) - European shares fell early on
Thursday, ahead of two major central bank decisions, as gains in
retailers Carrefour <CARR.PA> and Ahold <AHLN.AS> and energy
stocks were offset by losses in the banking sector.
By 0904 GMT the FTSEurofirst 300 index <> of top
European shares was down 0.8 percent at 1,291.37 points. The
index rallied 1.7 percent on Wednesday.
Banks were the worst drag on the broader market, as
persistent concern over the slowing U.S. economy and nervousness
ahead of the European Central Bank and the Bank of England's
respective rate decisions stripped 0.6 percent off the sector.
"The main trigger today will be Mr Trichet, what comments he
will give and what he will say on inflation and ... growth,"
said Heinz Gerd Sonnenschein, an equities analyst at Deutsche
Postbank.
The ECB and the BoE are expected to keep rates steady.
Investors will focus on comments by ECB President Jean-Claude
Trichet at the news conference at 1330 GMT.
The FTSEurofirst 300 has shed about 14 percent this year,
largely due to worry about the profitability of the financial
sector after last year's credit squeeze and the outlook for the
U.S. economy.
The latest stream of data from the United States suggest a
slowdown is gathering pace and the market has priced in
aggressive rate cuts accordingly.
Euro zone data also points to a slowdown, although the ECB's
stress on anchoring inflation expectations has left stock
markets with little hope of immediate rate cuts to ward off
further weakening in growth.
"The ECB press conference is likely to re-emphasise the
state of high economic uncertainty and the stagflationary
dynamics taking hold of Eurozone activity, which leaves the ECB
in a "wait and see" stance with rates likely to stay at 4
percent," said Lena Komileva, G7 economist at Tullett Prebon.
HSBC <HSBA.L> was the largest weighted negative influence on
the broader market, falling nearly 2 percent, while UBS
<UBSN.VX>, ING <ING.AS> and BNP Paribas <BNPP.PA> were down
between 1.8 and 2.5 percent.
Insurers AXA <AXAF.PA>, Allianz <ALVG.DE> and Aegon
<AEGN.AS> were down between 2 and 3.5 percent. Aegon posted a 26
percent drop in quarterly profit.
CARREFOUR BOOSTS RETAILERS
Retailers were among the major gainers.
Carrefour shares were up 2.7 percent after Europe's largest
retailer reported slightly higher 2007 profits and said it aimed
to return around 4.5 billion euros to investors in coming years.
Dutch supermarket group Ahold <AHLN.AS> rose 1.8 percent
after reporting forecast-beating fourth-quarter profits, while
Belgium's Delhaize edged up 0.5 percent after reporting a 7.4
percent decline in fourth-quarter operating profit that fell
short of expectations.
High crude prices boosted index heavyweights BP <BP.L>,
Royal Dutch Shell <RDSa.L> and Total <TOTF.PA>, by 0.5-0.6
percent.
Dutch chemical group Akzo Nobel NV <AKZO.AS> was among the
top gainers in Europe after reporting a 43 percent rise in
fourth quarter core profit thanks to cost savings and higher
margins. Akzo shares rose by nearly 5 percent, with nearly 40
percent of the 30-day average daily volume having already
changed hands.
"The net cash position of EUR 8bn is EUR 0.4m above our
estimate and the pension deficit (including ICI) is even EUR 1bn
better," said Rabobank strategists in a note.
"We continue the buy on Akzo Nobel where there is further
room for an increase of our EUR 58 price target. We should see a
positive share price reaction over the coming days, we believe."
(Editing by Catherine Evans)
