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Miners drag down Europe shares; techs limit losses

Published 01/14/2011, 04:54 AM
Updated 01/14/2011, 04:56 AM
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* FTSEurofirst 300 falls 0.6 percent after 28-month high on Thu

* Miners top losers as metals prices slip on China concerns

* Intel results support tech shares, ARM Holdings soars

* For up-to-the-minute market news, click on

By Atul Prakash

LONDON, Jan 14 (Reuters) - European equities slipped on Friday as weaker metals prices on concerns over China's monetary policy tightening pressured mining stocks, though losses were limited by firmer tech shares following strong Intel results.

Lingering worries about the euro zone debt crisis and the U.S. jobs market prompted investors to trade cautiously. Thursday's figures showed weekly initial U.S. jobless claims last week jumped to their highest level since October.

At 0931 GMT, the FTSEurofirst 300 index of top European shares was down 0.6 percent at 1,150.70 points after closing 0.6 percent lower in the previous session, when the index hit a 28-month high before surrendering gains.

Miners topped the fallers' list, with copper down on worries top metals consumer China might take further steps to cool its economy. The STOXX Europe 600 Basic Materials index fell 1.4 percent, while Antofagasta dropped 1.3 percent.

Analysts said equities will continue to stay data-sensitive and be influenced my the macroeconomic factors.

The U.S. Federal Reserve Chairman Ben Bernanke said the outlook for the U.S. economy has brightened, but warned on Thursday that growth this year won't be strong enough to cut the jobless rate as quickly as policy makers would like.

"Investors are still assessing the state of the jobs market in the United States and the European sovereign debt situation is still in the background," said Keith Bowman, equity analyst at Hargreaves Lansdown.

"We did have a reasonably favourable Spanish bond auction yesterday, but I don't think the difficulties are expected to go away. But we have had some good figures from Intel overnight and that will provide some support."

INTEL BOOSTS TECHNOLOGY SHARES

Technology shares featured among the top gainers after Intel Corp, the world's largest chipmaker, posted better-than-expected revenue and margins for the fourth quarter and gave a rosy outlook for early 2011 late on Thursday. Intel shares in Frankfurt rose 2.4 percent.

ARM Holdings was up 6.5 percent after hitting a 10-year high, while other European technology companies Infineon and ASML Holding rose 1.2 percent and 2.8 percent respectively. The sector index rose 0.6 percent.

"The main impact of Intel's comments came from its ongoing confidence in the strength of end markets in 2011 and beyond, although guidance was only given for 2011," Charles Stanley analyst Tom Gidley-Kitchin said.

"The increase in ARM's share price implies that investors are not agreeing with Intel's view that it (Intel) will make major inroads into the tablet and smartphone markets, nor that it will see off competition in netbooks etc. from new ARM-based chips from the likes of Nvidia."

Investors waited for results from JPMorgan, which will kick off the banking sector's earnings season. The bank is seen posting lower trading revenues from its investment banking unit compared to the year earlier, while it boosted revenue from debt and equity underwriting.

On the economic front, the market will scrutinise the U.S. consumer price index and December retail sales figures and the Reuters/University of Michigan sentiment data.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 fell 0.1 to 0.4 percent. (Editing by Hans Peters)

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