* FTSEurofirst 300 index falls 0.4 percent
* Banks with exposure to peripheries slip
* Acquisition news buoys luxury goods sector
By Joanne Frearson
LONDON, March 7 (Reuters) - European shares ended lower on
Monday after investor concerns about the impact of oil prices on
the recovery prompted a late afternoon sell-off, with banks
among the biggest sector fallers.
The pan-European FTSEurofirst 300 <> index of top
shares closed down 0.4 percent at 1,143.86 points after being up
as much as 1,157.38 earlier in the session after M&A news lifted
sentiment.
Volume was at 97.9 percent of the index's 90-day average.
"Uncertainty is rising and investors have been taking
profits since Wall Street turned lower," said Heino Ruland,
strategist at Ruland Research in Frankfurt.
"There are still problems in Libya and there are concerns
the oil price might curb economic recovery. I think investors
will continue to reduce exposure to their risk profile."
Concerns over supply disruptions in the Middle East had sent
Brent crude <LCOc1> up around $118.50 a barrel, fuelling worries
stronger crude prices could spur inflation and hit the economic
recovery.
The STOXX Europe 600 Banks <.SX7P> was among the worst
performing sectors, down 0.8 percent, with certain stocks
exposed to the euro zone periphery hard hit after ratings agency
Moody's downgraded Greece by three notches.
Dexia <DEXI.BR>, Credit Agricole <CAGR.PA> and Societe
Generale <SOGN.PA> all ended down 1.4 percent to 2 percent.
The mining sector was also under pressure after investors
decided to take risk off the table on worries the global
recovery may stall.
Vedanta Resources <VED.L>, Rio Tinto <RIO.L> and Kazakhmys
<KAZ.L> slipped 1.7 to 3.6 percent.
Looking at individual stocks on the downside, satellite
telecommunications operator Inmarsat <ISA.L> dropped 13.4
percent after a key maritime revenue forecast missed
expectations. []
M&A BOOST
On the upside, merger and acquisition news boosted luxury
good stocks after France's LVMH <LVMH.PA> said it would buy
Italy's Bulgari <BULG.MI> in a 3.7 billion euros ($5.19 billion)
deal. []
Sector peers Richemont <CFR.VX> and Burberry Group <BRBY.L>
gained 2.2 percent and 3.6 percent respectively.
Elsewhere Investor AB <INVEb.ST> gained 2.8 percent on
merger and acquisition news. Japan's Terumo Corp <4543.T> said
it would buy CaridianBCT from Gambro, which is jointly
controlled by Investor AB and private equity funds manager EQT
IV. []
British testing firm Intertek <ITRK.L> rose 5 percent after
it announced it was buying quality and safety services firm
Moody International and reported forecast-beating full-year
profits. []
Tognum <TGMG.DE> was up 23.1 percent on news that Daimler
<DAIGn.DE> and Rolls-Royce <RR.L> were considering a joint bid
for the enginemaker. []
"I think over a longer period of time, the more relevant the
de-equitisation theme, when you include sovereign wealth funds,
buy-back of stock, company-to-company purchases," a London-based
trader at a U.S. investment bank said.
In the short term, however, the market was seeing less
equity trade and less long-only flow, "so we end up being driven
up and down by punters such as hedge funds," he added.
Europe's stock valuation levels remained relatively low,
with the STOXX Europe 600 <> carrying a forward P/E ratio
of 10.95, well below a 10-year average of 13.61, according to
Thomson Reuters Datastream.
Across Europe, the FTSE 100 <> index was down 0.3
percent, Germany's DAX <> was down 0.2 percent and
France's CAC 40 <> was down 0.7 percent.
(Additional reporting by Simon Jessop; Editing by Jon
Loades-Carter)
