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Europe shares end lower on weaker oils, drugmakers

Published 09/15/2010, 12:56 PM
Updated 09/15/2010, 01:00 PM
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* FTSEurofirst 300 ends 0.3 pct lower after choppy trade

* Energy shares among top decliners as crude prices slip

* NEXT jumps 6.7 percent; says market seen stabilising

By Atul Prakash

LONDON, Sept 15 (Reuters) - European shares finished lower after a choppy trading session on Wednesday, with disappointing economic numbers forcing investors to stay cautious, while a sharp decline in crude prices put pressure on energy stocks.

The FTSEurofirst 300 <.FTEU3> index of top European shares finished 0.3 percent lower at 1,084.54 points after falling to a low of 1,078.90 earlier in the session.

Energy shares topped the losers list, pressured by a decline of more than 2 percent in crude oil prices on news a pipeline operator was preparing to reopen a crude line. BP , Total and StatoilHydro shed 1 to 2.7 percent.

Analysts, however, remained positive about the near term outlook after a jump in European equities this week to their highest level in more than four months.

"The market is beginning to look a little overbought at the moment, given the rush that we have seen. Some kind of consolidation or a bout of profit-taking is not unexpected," said Mike Lenhoff, chief strategist at Brewin Dolphin.

"Sentiment has certainly turned in favour of a view that a relapse back into recession will be avoided. The more recent economic news has been supportive of that view."

Figures showed on Tuesday that U.S. retail sales rose in August for their largest gain in five months, while Friday's data showed that U.S. wholesale inventories surged by the largest amount in two years in July.

But European equities extended losses earlier on Wednesday after a report showed that a measure of New York state business conditions slipped to the lowest in more than a year. The market pared losses later in the session.

U.S. Federal Reserve data showed industrial output rose at a slower pace in August, suggesting that the economy was cooling, but not installing. [ID:nN15145257]

TRIPLE WITCHING

Across Europe, Germany's DAX <.GDAXI> fell 0.2 percent, while France's CAC 40 <.FCHI> dropped 0.5 percent. Britain's FTSE 100 <.FTSE> fell 0.2 percent after closing marginally higher in the previous session and hitting a four-month closing high on Monday.

"Before we get too bullish on the UK market, we really need to see the U.S. market breaking higher as well," said Bill McNamara, technical analyst at Charles Stanley.

"With that in mind, it is worth noting that Friday is 'triple-witching' on Wall Street -- the expiration of stock and bond options and futures, which could yet result in considerable volatility."

The FTSEurofirst 300 hovered in a wide range of 1,078.90 and 1,088.41 points, with lower volumes exaggerating the moves, traders said. The volume on the index was 74 percent of its 90-day daily average.

In industry news, the European Union's executive unveiled a blueprint to curb or ban short-selling and tighten controls on derivatives in one of its most ambitious financial reforms since the economic crisis unfolded. [ID:nLDE68E18S]

"No financial market can afford to remain a Wild West territory," said Michel Barnier, the EU commissioner in charge of financial services reform. "We have to limit risks of hyper-speculation."

Drugmakers featured among the worst performers. AstraZeneca fell 1.1 percent after it said its potential new blockbuster heart drug Brilinta faces a three-month delay in winning U.S. approval, slicing valuable revenue-earning time off the product. Roche , Merck and Novo Nordisk down 0.1 to 1.8 percent. [ID:nLDE68E06U]

Next , Britain's No.2 fashion retailer, jumped 6.7 percent. The company said its market had not got any worse since early August and appeared to be stabilising as it met forecasts for first-half profit and detailed plans to grow earnings.

Carmakers gave some support to the index as Renault rose 1.8 percent after Japan intervened in the foreign exchange markets for the first time in six years making exports more attractive for Nissan Motors <7201.T>, which is part-owned by the company. [ID:nLDE68E0H4] [ID:nTOE68E06P] (Editing by Mike Nesbit)

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