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Europe shares close lower, falling for 4th week

Published 07/10/2009, 11:41 AM
Updated 07/10/2009, 11:48 AM
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LONDON, July 10 (Reuters) - European shared closed lower on Friday, and notched up a fourth straight week of losses on worries about corporate earnings and the pace of economic recovery, with drugmakers and banks suffering most.

The FTSEurofirst 300 index of top European shares fell 1.1 percent to a provisional close of 814.43 points, its lowest close in more than 10 weeks.

Over the week, it fell 3.3 percent, but is still up more than 26 percent from the record low it hit in early March.

Drugmakers were among the biggest losers. GlaxoSmithKline, Novartis, Shire, AstraZeneca, Roche and Sanofi-Aventis fell between 0.7 and 2.5 percent.

Next week, Novartis will be the first of the sector's major players to report second-quarter earnings.

Pharmas initially fared better in the downturn than other sectors but have begun to underperform, and bleak prospects of more competition, problems getting new drugs to market and cheaper medicines are looming on investors' radars.

U.S. consumer sentiment soured in early July, slipping to its weakest since March, when confidence in the financial sector and economy were at a low ebb, the Reuters/University of Michigan Surveys of Consumers showed on Friday.

Consumers' escalating concerns about an extended economic downturn, job security and erosion of wealth were the main factors depressing sentiment, the survey said.

Its preliminary index of confidence for July fell to a reading of 64.6 from the final reading for June of 70.8.

"The Michigan number was a bit of a disappointment," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities, in London.

"But second-quarter earnings have become more important than ever, as the market is focused on recovery. Expectations have been revised down so much, that earnings may end up surprising some people on the upside." (Reporting by Brian Gorman)

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