By Amanda Cooper
LONDON, Feb 14 (Reuters) - European shares ended little
changed after a volatile session on Thursday after upbeat
earnings from the likes of Capgemini <CAPP.PA> were offset by
losses among banks after UBS <UBSN.VX> revealed huge exposure to
U.S. mortgages.
The FTSEurofirst 300 index <> of top European shares
ended up 0.1 percent at 1,335.54, having risen by as much as 1.3
percent earlier. The index is on course for its most volatile
week since mid-2003.
The market fell in late trade after Federal Reserve Chairman
Ben Bernanke said the central bank would have to lower its
projections for U.S. growth and warned that more
subprime-related writedowns at the investment banks were likely.
UBS shares were the biggest drag, falling by over 8 percent
after the company shocked markets with $26.6 billion in exposure
to risky U.S. mortgages distinct from subprime loans, increasing
its vulnerability to the global credit crisis.
UBS shares have fallen by nearly 30 percent this year.
The broader European market rose earlier in the day, before
Bernanke's remarks, after strong earnings from Capgemini
<CAPP.PA>, Europe's largest computer consultancy, and Zurich
Financial <ZURN.VX>.
"Economic conditions in the US have worsened over recent
months and credit conditions remain tight," said Steve Cleal,
Morley's head of strategy and multi-asset funds.
"Equity markets are expected to remain volatile in the near
term and for a sustainable recovery to emerge, investors will
require signs that the U.S. economy is beginning to respond to
easier monetary conditions."
Among the banks, Commerzbank <CBKG.DE> dropped 6.6 percent
after saying its bill from the subprime crisis crept up towards
800 million euros ($1.2 billion) in 2007.
Royal Bank of Scotland <RBS.L> fell 2.2 percent, Barclays
<BARC.L> lost 2.4 percent and Deutsche Bank <DBKGn.DE> fell 1.3
percent.
STANDOUT GAINERS
Among gainers, Capgemini, Europe's largest computer
consultancy, soared 8 percent after posting forecast-beating
earnings and boosting its dividend.
Zurich Financial was among the top positive weights on the
broader European market, rising 4.4 percent after reporting
earnings, while Swedbank <SWEDa.ST> rose 6.35 percent after
reporting better-than-expected results.
Energy shares were the top performing sector as crude oil
prices rallied <CLc1>. Total <TOTF.PA> added 1.1 percent and BP
<BP.L> rose 0.5 percent.
Anglo American <AAL.L> gained 2.3 percent on a newspaper
report suggesting that Rio Tinto <RIO.L> could bid for the
group. Rio declined comment.
French cement maker Lafarge <LAFP.PA> rose 1.7 percent and
Dutch staffing company Randstad NV <RAND.AS> surged 5.1 percent
after its fourth quarter results beat expectations.
"The results from Europe have been good, but like 2003, we
are in an inflection year, and in an inflection year, one needs
to look forward and trailing earnings are meaningless," said Ad
van Tiggelen, senior strategist at ING Investment Management in
Amsterdam.
"We are in a bear market and this is a bear market rally."
The FTSEurofirst 300 has lost 11 percent so far in 2008, hit
by recession fears. It is down 18 percent since reaching a
multi-year peak in July last year.
On the macro front, quarterly euro-zone economic growth grew
by 0.4 percent quarter-on-quarter in October to December,
against 0.8 percent in the third quarter, confirming
expectations of a slowdown.
Around Europe, Germany's DAX index <> was down 0.2
percent, Britain's FTSE 100 index <> and France's CAC 40
<> were both flat.
(Additional reporting by Anshuman Daga and Sitaraman Shankar
in London and Blaise Robinson in Paris; Editing by Quentin
Bryar)
