By Amanda Cooper
LONDON, April 24 (Reuters) - European shares fell on
Thursday, led by a decline in banking shares after more
writedowns from Credit Suisse <CSGN.VX> and a bearish update
from Barclays <BARC.L>.
Beyond the financial sector, earnings from a number of
European large caps including ABB <ABBN.VX> and Bayer <BAYG.DE>,
beat forecasts, raising some optimism that the corporate world
may be more resilient to the global credit crunch and a slowing
economic backdrop than feared.
Banks were the largest negative weight on the broader
market, led by Royal Bank of Scotland <RBS.L>, which earlier in
the week unveiled a record $12 billion rights issue, while
Barclays said first-quarter profits fell from a year earlier.
RBS and Barclays shares were among the top individual drags
on the market, falling by 3.5 and 2.1 percent, respectively.
Credit Suisse, meanwhile, revealed $5.3 billion in
credit-related writedowns, which was roughly in line with market
expectations, although this did produce a bigger-than-expected
loss. Its shares pared early gains to trade down 1.1 percent.
By 0817 GMT the FTSEurofirst 300 index <> of top
European shares was down 0.9 percent at 1,301.00 points.
Declining shares outnumbered advancers by six to one.
"Markets are getting worse-than-expected writedowns from
places like Credit Suisse. There is a feeling, whether right or
wrong, that the financials are 'kitchen-sinking' ... and
therefore writedowns are not as shocking as they would have been
a quarter or two ago," said Bernard McAlinden, an investment
strategist for NCB Stockbrokers in Dublin.
"What is holding up on earnings is the international side.
ABB having strong demand from China and India and BASF and
Bayer, with what is happening in the agricultural industry."
ABB was the top single positive influence on the broader
market, rising by more than 5 percent after nearly doubling its
first-quarter net profit, easily beating forecasts, and
reiterating its 2008 outlook.
Standard & Poor's equity research raised ABB to "strong buy"
from "buy" after the company's results.
Bayer posted a 9 percent increase in quarterly operating
profit thanks to its contraceptives and multiple sclerosis drugs
as well as farming products used to fight weeds and fungi.
It maintained its 2008 group outlook but raised its
forecasts for its CropSciences business thanks to booming
agricultural markets.
Germany's BASF <BASF.DE>, the world's biggest chemicals
company by sales, remains upbeat despite signs of a slowing
global economy after posting strong first-quarter results that
beat expectations.
BASF shares were down by more than 1 percent but the stock
has rallied by nearly 8 percent so far this quarter.
Other declining shares included French carmaker Peugeot
Citroen <PEUP.PA>, which fell by more than 4 percent after it
kept its target for 2008 sales volume to rise 5 percent after
first-quarter volume rose 6.1 percent.
All seven major European carmakers were down, dragging the
DJ Stoxx index of European auto stocks down <.SXAP> by 2.2
percent, despite a drop in the euro against the dollar <EUR=>
after a worse-than-expected read of German investor sentiment.
(Editing by David Holmes)
