* FTSEurofirst 300 index down 0.9 pct
* Commods, banks drag index lower
* Iberdrola falls on cash call
By Harpreet Bhal
LONDON, June 17 (Reuters) - European shares fell for the
fourth day on Wednesday led lower by banks and commodities,
while Iberdrola <IBE.MC> and Sainsbury <SBRY.L> both fell after
announcing plans to raise fresh capital.
By 0855 GMT, the FTSEurofirst 300 <> index of top
European companies was down 0.9 percent at 854.60 points.
Optimism about a global economic recovery has helped the
FTSEurofirst 300 gain 33 percent since it hit a low in March
this year, but the index has lost 3.46 percent so far this weak
and analysts believe the prospect of a recovery was not enough
to justify the rally.
"We had a very good run from the March lows.. the market was
losing some momentum and getting ready for some form of
correction," said Bernard McAlinden, strategist at NCB
Stockbrokers.
Banks took the most points off the index. BNP Paribas
<BNPP.PA>, UniCredit <CRDI.MI> and Societe Generale <SOGN.PA>
were down 1.1-1.5 percent.
Miners Rio Tinto <RIO.L> and BHP Billiton <BLT.L> shed 3.6
percent and 2 percent, respectively, after officials in China
said the two firms' proposed iron-ore joint venture had a
"strong monopolistic flavour". []
Fellow miners Anglo American <AAL.L>, Antofagasta <ANTO.L>,
Eurasian Natural Resources Corporation <ENRC.L> and Xstrata
<XTA.L> all slipped between 2.3 percent and 3.7 percent.
Energy firms were also lower as crude <CLc1> hovered around
$70. BG Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L> and
Tullow Oil <TLW.L> fell 0.3-0.8 percent.
Across Europe, Britain's FTSE 100 <> fell 0.5 percent,
Germany's DAX <> shed 0.6 percent and France's CAC 40
<> was down 0.7 percent.
IBERDROLA FALLS ON CASH CALL
Spanish utility Iberdrola lost 4.9 percent after it
surprised investors on Tuesday with plans to issue and sell at
least 1.25 billion euros of shares without resorting to a right
issue. [].
Britain's third-biggest grocer Sainsbury fell 4.7 percent
after it announced plans to raise 445 million pounds to
accelerate its expansion.
Traders said the share placing had been priced at 310 pence
each. []
"The capital raising will most likely put some near term
pressure on the shares... although we are supportive of the move
which allows an acceleration of the growth strategy," Cazenove
wrote in a research note.
Defensive pharmaceutical stocks were well supported as
investors looked to assets perceived as safe-bets. AstraZeneca
<AZN.L> rose 1 percent while Novartis <NOVN.VK> and
GlaxoSmithKline <GSK.L> added 0.3 percent and 0.1 percent.
In economic news, the number of Britons claiming jobless
benefit rose less than expected in May, although the rate was
its highest in more than a decade, official data showed.
[]
Meanwhile, the Bank of England's Monetary Policy Committee
voted unanimously to keep interest rates at a record low of 0.5
percent and maintain its 125 billion pound quantitative easing
programme, minutes showed. []
Later in the session, investors may focus on U.S May CPI
figures due out at 1230 GMT.
(Additional Reporting by Joanne Frearson, Editing by Simon
Jessop)
