By Peter Starck
FRANKFURT, April 14 (Reuters) - European stocks fell for the
fifth straight session on Monday, led by Credit Suisse <CSGN.VX>
after media reports of further asset writedowns at the Swiss
bank, and Philips <PHG.AS> on below-forecast first-quarter
earnings.
Other losers included mining groups Anglo American <AAL.L>,
down 3.1 percent, and BHP Billiton <BLT.L>, down 2.3 percent,
after Chinese coal miner Shenhua Energy denied a report that it
planned to buy a stake in Anglo American and dashed speculation
that it was among a group interested in BHP.
Shares in Friends Provident <FP.L> lost more than 10 percent
after buyout group J.C. Flowers said it did not intend to raise
its proposed 3.5 billion pound ($6.9 billion) takeover offer and
would walk away if the British insurer insurer does not begin
talks by Friday.
Friends Provident said the bid significantly undervalues it.
The FTSEurofirst 300 <> index of leading European
shares closed 0.8 percent lower at 1,275.00 points. It has
fallen 15.4 percent this year compared with a 9.4 percent loss
for the U.S. benchmark S&P 500 index <.SPX>, which was 0.2
percent in the red as the European trading day ended.
The euro appreciated against the dollar <EUR=>, dimming
prospects for European exporters such as car makers, making the
DJ Stoxx auto index the day's weakest sector performer in Europe
with a loss of 1.7 percent.
Germany's BMW <BMWG.DE> and France's Peugeot Citroen
<PEUP.PA> fell more than 3 percent each.
"We remain concerned with corporate earnings delivery in
2008 on the back of a weakening top line, euro strength and
margin pressure," JPMorgan said in a European equity research
note.
"We would not extend this into a concern over the market
direction. We believe the time when the market was pricing in
earnings disappointments was over the last six to seven months,
and that now is a good point to start to price in a potential
rebound in earnings delivery in the second half of the year," it
said.
Market activity on Monday was thin, traders said.
"Nobody is willing to do anything, neither buy nor sell,
that's what we hear from our customers," said one trader at a
big German bank, pointing to investors' fears of yet another
round of financial industry writedowns and losses.
CREDIT PROBLEMS
Wachovia Corp <WB.N>, the fourth-largest U.S. bank, posted a
surprise first-quarter loss on Monday as credit problems from
mortgages and other debt soared, prompting Wachovia to raise $7
billion of capital, slash its dividend and cut jobs.
In Europe, Credit Suisse shares lost 3.3 percent after
weekend newspaper reports that it could announce further
writedowns of up to 5 billion Swiss francs ($5 billion) when it
posts first-quarter results later this month. The bank declined
to comment.
Shares in fellow Swiss bank UBS <UBSN.VX> lost 2.4 percent,
Lloyds TSB <LLOY.L> fell 2.8 percent, Royal Bank of Scotland
(RBS) <RBS.L> fell 2.1 percent and Barclays <BARC.L> dropped 2
percent.
Morgan Stanley cut its price target for Lloyds to 300 pence
from 380 pence, for RBS to 300 pence from 350 pence and for
Barclays to 450 pence from 550 pence.
"We retain Lloyds TSB as our top 'underweight' and feel
capital increases are increasingly likely at RBS and Barclays,"
Morgan Stanley said in a research note on UK banks.
Later in the week, investors will comb through quarterly
results from U.S. banks JPMorgan Chase & Co <JPM.N>, due on
Wednesday, Merrill Lynch & Co <MER.N>, due on Thursday, and
Citigroup Inc <C.N>, due on Friday.
On Monday, shares in Philips Electronics, whose
first-quarter core profit fell 28 percent, dropped 3.3 percent
to their lowest close since mid-July 2006.
"We expect consensus estimates for 2008 to decrease by 10-15
percent, with decreasing confidence on 2009 and 2010 targets,"
Cazenove said, referring to Philips.
"Global businesses are going to be nervous that what's
happening in the United States is spilling over elsewhere and
the tech sector is one of the most sensitive barometers of
that," said John Haynes, an investment strategist at Rensburg
Sheppard Investment Management.
In the European top-300 universe <0#.FTEU31><0#.FTEU32>,
falling stocks led risers by five-to-one. Among gainers, Danone
<DANO.PA> rose 2.7 percent to 56.83 euros after the French food
group reported a 19 percent rise in quarterly sales and said it
was on course to meet its sales and earnings growth targets.
"Danone's core business is firing on all cylinders," said
Citigroup, which rates the stock "buy" with a target price of 62
euros.
Shares in Dutch mail company TNT <TNT.AS> rose 2.5 percent
helped, said traders, by Goldman Sachs upgrading its rating on
the stock to "buy" from "neutral".
(Additional reporting by Blaise Robinson in Paris and
Sitaraman Shankar in London; Editing by Erica Billingham)
