By Sitaraman Shankar
LONDON, Aug 4 (Reuters) - European stocks fell in choppy
trade early on Monday, as in-line results from the region's
largest bank, HSBC <HSBA.L> failed to enthuse investors, and
offset a gain in energy shares that tracked crude higher.
At 0923 GMT, the pan-European FTSEurofirst 300 <>
index fell 0.2 percent to 1,161.12 points.
HSBC <HSBA.L> fell 1.9 percent to take the most points off
the index after saying first-half profits fell 28 percent to
just over $10 billion, in line with analysts' forecasts, as bad
debts on U.S. home loans and asset writedowns countered strong
Asian growth.
The other financial group to report on Monday, Belgian-Dutch
Fortis <FOR.AS> <FOR.BR>, fell 1.6 percent after rising in early
trade. Its net profit halved in the second quarter on
writedowns, and it said it would push forward with plans to
improve its capital base.
Other banks were mostly lower, with UBS <UBSN.VX> down 2.4
percent, BNP Paribas <BNPP.PA> down 2 percent and Barclays
<BARC.L> off 0.6 percent.
"The bank reporting season in the United States was
generally positive and hopefully European banks will not be as
bad as expected -- clearly results from industrial companies are
not enough to support the market," said Thierry Lacraz,
strategist at Pictet in Geneva.
Oil shares added the most points to the index, helped by a
27 cents-a-barrel rise in the price of crude to $125.33 on
concerns over Iran's nuclear activities, a tropical storm that
has formed near the Gulf of Mexico and more violence in OPEC
member Nigeria.
BP <BP.L> gained 1.9 percent, Royal Dutch Shell <RDSa.L>
rose 2.6 percent and BG Group 2.1 percent. The sector
contributed more than 40 percent of the positive index points.
Across Europe, Britain's FTSE 100 <> was up 0.9
percent, Germany's DAX <> down 0.1 percent and France's
CAC <> up 0.3 percent.
MINERS FALL, EYES ON CENBANKS
Miners were among the worst losers, tracking a fall in metal
prices.
Anglo American <AAL.L>, Eurasian <ENRC.L>, Kazakhmys <KAZ.L>
and Ferrexpo <FXPO.L> fell 1.5-2 percent.
Among other major movers, German carmaker Daimler <DAIGn.DE>
jumped 3.8 percent on a magazine report that hedge funds were
building a stake in the company, while Telecom Italia <TLIT.MI
fell 2 percent and hit a 10-1/2 year low after its chief
executive ruled out a possible hostile bid from Telefonica
<TEF.MC>.
Later in the week, investor focus shifts to interest-rate
decisions from the U.S. Federal Reserve, the European Central
Bank and the Bank of England, who are all expected to stay on
hold.
Lacraz said he did not expect any surprises from the three
central banks.
"The economic situation is too weak now for big steps to be
taken -- negative economic surprises from the eurozone are the
most common for the moment, which is a fact the ECB will have to
keep in mind."
Underlining inflation concerns, Euro zone June producer
prices rose 0.9 percent month-on-month, ahead of a 0.8 percent
forecast from a Reuters poll.
(Reporting by Sitaraman Shankar; Editing by Quentin Webb)
