* FTSEurofirst 300 falls 0.1 pct
* Financials, drugmakers among top decliners
* Telecom shares advance
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, Oct 21 (Reuters) - European shares drifted further
away from one-year highs on Wednesday, pressured by financial
stocks after Bank of England Governor Mervyn King added his
voice to calls for root-and-branch reforms of the sector.
King said on Tuesday in Edinburgh that a fundamental rethink
of how the banking sector is structured and regulated is needed
to prevent a recurrence of the financial crisis. []
[]
The FTSEurofirst 300 <> index of top European shares
fell 0.1 percent to 1,019.94 points by 0845 GMT after dropping
0.5 percent in the previous session. The index, which hit a
one-year high on Tuesday before falling, is up 23 percent this
year and has surged 58 percent since hitting a record low in
March.
Analysts said investors were cautious following the market's
inability to post convincing gains in recent days. The index had
fallen in five of the previous 10 sessions.
Morgan Stanley <MS.N> and Boeing <BA.N> are due to report
results later in the day.
"Markets have taken a breather. Nothing moves in a straight
line, so market timing is becoming more and more acute," said
John Murphy, analyst at ODL Securities.
"We are entering an intense period. Whilst over the longer
term the bulls have clearly taken the lead, the short term
appears to be a little more cloudy."
Banks were among the top losers, with Standard Chartered
<STAN.L>, Lloyds <LLOY.L>, Royal Bank of Scotland <RBS.L>, BNP
Paribas <BNPP.PA>, Societe Generale <SOGN.PA>, Credit Agricole
<CAGR.PA> and Natixis <CNAT.PA> down 0.1 to 1.3 percent.
Deutsche Bank <DBKGn.DE> fell 3.1 percent after the bank
said tax credits had flattered net profit in the third quarter.
[].
Drugmakers also came under pressure. AstraZeneca <AZN.L>,
GlaxoSmithKline <GSK.L>, Merck <MRCG.DE>, Novartis <NOVN.VX>,
Novo Nordisk <NOVOb.CO> and Roche Holding <ROG.VX> fell 0.1 to
0.9 percent.
Across Europe, Britain's FTSE 100 index <>, Germany's
DAX <> and France's CAC 40 <> fell 0.1-0.3 percent.
TELECOMS SUPPORT
On the positive side, telecom shares were in demand.
Deutsche Telecom <DTEGn.DE>, Vodafone <VOD.L>, France Telecom
<FTE.PA>, BT Group <BT.L> and Mobistar <MSTAR.BR> rose 0.6 to
1.7 percent.
Britain's Cadbury <CBRY.L> rose 0.2 percent after it beat
sales forecasts and raised targets in a bumper third-quarter
trading report, surprising investors and pressuring suitor Kraft
<KFT.N> to come up with a much bigger bid to win its takeover
battle.
"Overall, Cadbury management has successfully laid out its
hand ... showing how attractive Cadbury is," said Andrew Wood,
senior research analyst at Sanford C. Bernstein.
"And this trading update should put further pressure on
Kraft to increase its bid."
Spanish infrastructure company Grupo Ferrovial SA <FER.MC>,
which has a majority stake in airports operator BAA, fell 4.5
percent. BAA agreed to sell Gatwick Airport for 1.5 billion
pounds ($2.46 billion), hoping to bolster its appeal against a
competition ruling that it must offload three airports in total.
The sale price is less than the airport's 1.6 billion pound
Regulated Asset Base value. []
BHP Billiton <BLT.L> was down 0.4 percent. The miner
confirmed a month-long outage at the world's No. 4 copper mine
and reported near flat quarterly output of iron ore.
[]
Top European computer chip maker STMicroelectronics <STM.PA>
fell 3.1 percent after it posted its seventh consecutive
quarterly loss, but its revenue and outlook topped expectations
and bolstered hopes the semiconductor industry is on the
rebound. []
(editing by John Stonestreet)
