* FTSEurofirst 300 index up 0.2 percent
* Syngenta lifts chemicals sector on Bayer read-across
* HSBC down sharply after results, banking sector pressured
By Harpreet Bhal
LONDON, Feb 28 (Reuters) - European shares edged up on
Monday, with agrochemical stocks lifted by positive comments on
the sector from Bayer <BAYGn.DE>, more than offsetting falls in
heavyweight HSBC <HSBA.L> following forecast-lagging results.
By 1220 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was up 0.2 points at 1,162.28 points, in the
second day of gains after the market snapped a week-long selloff
on Friday when it rose 1.2 percent.
Swiss agrochemicals group Syngenta <SYNN.VX> was among the
top gainers in Europe, up 3.7 percent on a positive read-across
after German rival Bayer cited optimism for its crop science
unit in 2011.
Within the sector, peer Yara International <YAR.OL> added
2.4 percent while the STOXX Europe 600 chemicals index <.SX4P>
rose 1 percent.
Falls in HSBC <HSBA.L>, however, dragged the banking sector
lower and kept gains in check on the broader market after it
posted a weaker-than-forecast pretax profit and cut its
profitability targets due to the cost of tougher regulation.
[]
The stock fell more than 5 percent, while UK peers Lloyds
Banking Group <LLOY.L> and Royal Bank of Scotland <RBS.L> lost
0.8 and 1.1 percent respectively.
Also keeping gains in check were worries over the supply of
crude oil arising from unrest in the Middle East and North
Africa, and its impact on inflation and growth.
"Should the geopolitical situation get worse, that will
clearly have an impact (on markets), but if we can ride this out
then it is perhaps a necessary break that the market needed
before it can go on and make new highs," said Giles Watts, head
of equities at City Index in London.
Investors were unsettled by the spread of unrest to Oman,
while in Libya Muammar Gaddafi defied demands he quit to end the
violence. []
Italy's ENI <ENI.MI>, the biggest foreign oil operator in
Libya, and Spain's Repsol <REP.MC> both shed around 0.2 percent
as crude prices <CLc1> hovered around $98 a barrel.
Across Europe, Britain's FTSE 100 <> shed 0.3 percent,
while Germany's DAX <> and France's CAC 40 <> were up
0.2 to 0.3 percent.
RETAILERS WEAK
Bucking the uptrend in the market, retailers were weak after
Associated British Foods (ABF) <ABF.L> reported a slowdown at
its discount fashion retailer Primark on rising taxes and an
inflation-driven spending squeeze. []
AB Foods lost 5.9 percent, while peers Next <NXT.L>, H&M
<HMb.ST> and Inditex <ITX.MC> shed 1.2 to 2.2 percent.
"It (ABF) expects this trend to continue for the balance of
the year, which points to a full-year like-for-like outcome of
around 2 to 3 percent, vs the 4 percent we have been assuming,"
RBS analysts wrote in a note.
Euro zone inflation was lower than initially estimated in
January, rising to 2.3 percent year-on-year, but the level was
still well above the European Central Bank's target and is
likely to rise further in February due mainly to more expensive
oil. []
On the upside, individual gainers include Italian power
generator Edison <EDN.MI>, which rose more than 3 percent to a
week high on reports shareholders France's EDF <EDF.PA> and
Italian utility A2A <A2.MI> are close to a deal on restructuring
their Edison ownership.
German business software maker SAP <SAPG.DE> rose 2 percent
as traders pointed to Barclays Capital hiking its price target
for the stock to 50.60 euros from 46.
(Editing by David Holmes)
