European shares fall as Buffett effect peters out

                                
 By Anshuman Daga
                                
 LONDON, Feb 13 (Reuters) - European equities fell on
Wednesday, losing steam from the previous session's 3 percent
jump, as markets reassessed investor Warren Buffett's offer to
reinsure some liabilities of ailing U.S. bond insurers.
                                
 Markets punished firms reporting results in line with market
estimates, with steel group Arcelor Mittal <MTP.PA> down 3
percent and German industrial conglomerate ThyssenKrupp
<TKAG.DE> losing 3 percent.
                                
 Bradford & Bingley <BB.L> slid 11 percent to a record low
after unveiling a writedown on its exposure to tarnished assets
and carmakers were higher after robust results from Peugeot.
                                
 By 0955 GMT, the pan-European FTSEurofirst 300 index
<.FTEU3> was 0.3 percent weaker at 1,329.6 points, having fallen
earlier by as much as 1.3 percent. The benchmark has lost about
12 percent so far this year.
                                
 "The market really doesn't have any conviction," said Dirk
Thiels, head of global equity funds at KBC Asset Management.
"There is so much uncertainty out there. There is a dark cloud
over earnings for 2008."
                                
 "Although any significant fall in earnings or slowdown in
earnings growth is already discounted in the market, but still
there is the uncertainty when earnings start to slow, how far
will they go," he said.
                                
 The S&P 500 index <.SPX> ended 0.7 percent higher on Tuesday
after earlier rising as much as 1.7 percent.
                                
 Equities rose after investor Warren Buffett offered to
reinsure $800 billion of U.S. municipal bond risks, easing
worries about the insurance sector's fragile health but the
momentum failed to carry through to Asia.
                                
 MSCI's index of Asian stocks outside Japan <.MIAPJ0000PUS>
edged down 0.2 percent, wiping out earlier gains.

                                
 SWEDISH RATE HIKE
                                
 Around European markets, London's FTSE 100 <.FTSE> lost
0.8 percent, Paris's CAC-40 <.FCHI> shed 0.5 percent and
Frankfurt's DAX <.GDAXI> fell 0.7 percent.
                                
 Swedish markets underperformed, with a key index <.OMXS30>
down 1.3 percent after Sweden's central bank raised its key
interest rate by 25 basis points to 4.25 percent, surprising
analysts who had expected no change, but the central bank said
there may be no further tightening ahead.
                                
 British specialist mortgage lender Bradford & Bingley took a
94 million pound writedown on its exposure to tarnished assets
and saw other big one-off items derail profits.
                                
 It is the latest bank to reveal a big hit after a credit
crunch has cut the value of assets in structured vehicles.
                                
 Shares in Swiss engineering group ABB <ABBN.VX> fell 9
percent as Chief Executive Fred Kindle quit after a clash over
strategy in a shock move amid speculation over his plans for
acquisitions.
                                
 Among gainers, carmaker Peugeot <PEUP.PA> rose 5 percent as
it boosted its thin profit margin.
                                
 Shares in Norwegian insurer Storebrand <STB.OL> jumped 11
percent after its fourth-quarter profit beat average estimates
in the market and the group announced a policy to pay out more
than 35 percent of after-tax profits in dividends.
  (Editing by Erica Billingham)