By Sitaraman Shankar
LONDON, Feb 6 (Reuters) - European shares traded lower early
on Wednesday, tracking falls in the United States and Asia on
growing recession fears, and hit by losses in BHP Billiton
<BLT.L> and banks.
At 0958 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.5 percent at 1,307.93 points, led
lower by banks. The index slipped 3.1 percent on Tuesday after
shockingly poor U.S. services data.
Credit Suisse <CSGN.VX> fell 4 percent, while BNP Paribas
<BNPP.PA>, UBS <UBSN.VX>, Royal Bank of Scotland <RBS.L> all
slipped by 1.6 to 2.2 percent.
But Societe Generale <SOGN.PA>, the bank at the centre of a
trader scandal, rose 2.3 percent as traders speculated about a
bid ahead of its planned capital increase.
Deutsche Postbank <DPBGn.DE> jumped 9.6 percent after a
newspaper report said parent Deutsche Post <DPWGn.DE> was
looking for a partner to Postbank to forge a leading German
retail bank group. Deutsche Post said it had not made any
decision about the future of Postbank.
Miners were mainly negative though investors were torn
between concern that BHP Billiton's <BLT.L> monster $147 billion
bid for rival Rio would succeed and hope that persistent talk of
a bid for Xstrata <XTA.L> from Brazil's Vale <VALE5.SA> would
lead to a deal.
BHP lost 5.6 percent, Xstrata gained 2 percent and other
miners such as Antofagasta <ANTO.L> and Vedanta <VED.L> were
lower.
Analysts said that in the current mood of uncertainty,
markets were constantly on edge.
"At the moment we have an asymmetric market, a market that
is chasing bad news," said Alain Bokobza, head of strategy at
Societe Generale in Paris.
"The probability of the United States entering recession in
Q1 is going through the 50 percent barrier, and the rise in the
dollar shows that people are starting to play a fall in ECB
rates quicker than market expectations," he added.
Across Europe, Britain's FTSE 100 <> fell 0.6 percent,
Germany's DAX <> slipped 0.4 percent and France's CAC
<> lost 0.5 percent.
SCURRY TO SAFE HAVEN
While prices of the traditional safe-haven asset classes of
gold and U.S. Treasuries edged up in tandem with a fall in
global equities, investors also sought succour within the stock
market, buying telcoms, utilities and food stocks.
France Telecom <FTE.PA> gained 1.9 percent after it raised
its cash flow outlook for 2008, and tobacco and food shares
rose, with Imperial Tobacco <IMT.L> gaining 0.9 percent, and
foods group Danone <DANO.PA> advancing 1.6 percent.
The FTSEurofirst 300 has fallen 13 percent so far this year,
after a meagre 1.6 percent gain in the whole of last year as a
bull market turned gradually bearish in the face of a global
credit squeeze, poor economic data and earnings downgrades.
(Editing by Quentin Bryar)
