By Eva Kuehnen
FRANKFURT, April 21 (Reuters) - European shares fell early
on Monday, giving up some of the gains in the previous session,
as losses in foods group Nestle <NESN.VX> and engineer Schneider
<SCHN.PA> offset a rise in drugmaker Novartis <NOVN.VX>.
By 0914 GMT, the pan-European FTSEurofirst 300 index
<> was down 0.5 percent at 1,319.46 points.
The index rallied 2.4 percent on Friday to its highest close
in 10 days, backed by gains in banking stocks after Citigroup's
<C.N> earnings update underscored hopes the end of the global
credit crisis was in sight.
"What we see today is more a technical reaction to Friday's
rally. It's calming down now," said Stefan Thomas, fund manager
at Frankfurt Trust.
Nestle fell 2.5 percent and was the biggest laggard on
Europe's FTSEurofirst 300 after the world's largest food group
reported first-quarter sales rose 6 percent to 25.7 billion
Swiss francs ($25.27 billion), in line with expectations, as a
weak dollar eroded strong gains in volume and pricing.
Analysts at Citigroup said, referring to Nestle's
like-for-like sales growth: "We believe that many investors were
already thinking around double digits."
Declines in French engineering group Schneider <SCHN.PA>,
down 5.2 percent after its first-quarter sales figures missed
forecasts, added to the downward trend.
The declines could not be fully offset by a 4.7 percent rise
in Novartis after Europe's second-largest drugmaker reported a
forecast-beating first-quarter net profit, up 10 percent at
$2.31 billion, helped by vaccines sales and the weak dollar.
KEY WEEK FOR UK BANKS
Banking stocks eased at the start of what could become a key
week for UK banks. The DJ Stoxx European bank sector <.SX7P> was
down 0.5 percent.
The Bank of England detailed a ground-breaking plan to lend
banks up to 50 billion pounds ($99.4 billion) to help them
operate during the credit squeeze.
Britain's second-biggest bank, Royal Bank of Scotland
<RBS.L>, eased 1 percent after confirming it was considering a
rights issue. Details could come on Tuesday, a day before its
annual investor meeting.
People familiar with the matter said the bank will seek to
raise up to 12 billion pounds.
"This would certainly help, depending on how the rights
issue goes through. Examples in Switzerland and the United
States have shown in the past that markets take positively to
such news, so this could lend support either today or later on
in the week," Thomas said.
Around Europe, the UK's FTSE 100 index <> was the
strongest performer, up 0.2 percent, while Germany's DAX index
<> fell 0.4 percent and France's CAC 40 <> eased 0.7
percent.
Later in the day, investors will eye earnings from the No. 2
U.S. bank, Bank of America <BAC.N>, due before Wall Street
opens.
(Reporting by Eva Kuehnen; Editing by David Hulmes)
