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European shares extend losing run to six sessions

Published 10/04/2010, 12:51 PM
Updated 10/04/2010, 12:56 PM
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* FTSEurofirst 300 closes 0.6 percent lower

* Oils give up some recent gains

* Autos slip after German sales fall

By Brian Gorman

LONDON, Oct 4 (Reuters) - European shares fell for a sixth straight session on Monday, as a decline in U.S. factory orders more than offset rising home sales, adding to investors' worries about the strength of the economic recovery.

The pan-European FTSEurofirst 300 index fell 0.6 percent to 1,051.05 points, its lowest close since Aug. 31. The index has lost 2.5 percent over the last six trading sessions, its longest losing streak since January 2009.

Pending sales of previously owned U.S. homes rose to a four-month high in August, implying the housing market was regaining some stability after recent steep declines following the end of a home-buyer tax credit.

But another report showed new orders received by domestic factories falling 0.5 percent.

"The pending homes data did bounce. But you'd need some really strong data to make people change their minds (about the pace of the recovery)," said Philip Isherwood, European equities strategist at Evolution Securities.

"The thing that is going to dominate the market this week is the non-farm payrolls on Friday ... We are hoping for a pickup. We're of the opinion that the corporate sector is doing its bit, in committing to inventories and investment, though people also say it's a jobless recovery," Isherwood said.

The STOXX Europe 600 autos sector index slid 2.7 percent, with BMW and Daimler AG losing 2.2 and 3.8 percent respectively after new car registrations fell in Germany.

COPPER PRICE

Heavyweight oil majors gave back some of their recent gains, though crude prices hovered near recent highs above $80. BP, ENI , Royal Dutch Shell, and Total fell between 1.4 and 2.4 percent.

Mining stocks were among the biggest fallers, with Antofagasta, Kazakhmys and Xstrata down between 1.9 and 2.6 percent as the price of copper and other metals prices fell.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 ended the day between 0.7 and 1.2 percent lower.

On Wall Street the Dow Jones, S&P 500 and Nasdaq Composite were down between 0.6 and 1.4 percent around the time European bourses were closing.

Greek banks gained 2.9 percent after Greece pledged to cut next year's budget deficit faster than agreed in a 110 billion euro ($150.8 billion) IMF/EU bailout deal, vowing another year of tough austerity to exit a debt crisis.

The recent retreat for the FTSEurofirst 300 "is not altogether surprising," said Bill McNamara, technical analyst at Charles Stanley in a note. "The medium-term uptrend is currently implying the possibility of support at around 1,028 and that line might come into play sooner rather than later."

In a bearish signal for equities, the Euro STOXX 50 index fell 1.2 percent at 2,701.02 points, well below its 50 percent Fibonacci retracement of its fall from a high in April to a low in May at 2,737.62 points.

Gas Natural shed 3.6 percent on fears that a negative ruling in its gas price dispute with Algeria's Sonatrach could threaten dividend payments.

Among other fallers, French drugmaker Sanofi-Aventis fell 0.6 percent after it launched a hostile bid for U.S. firm Genzyme at $69 per share, or $18.5 billion, setting off what could be a protracted battle for control of the biotech company. (Editing by David Holmes) ($1=.7296 EURO)

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