By Sitaraman Shankar
LONDON, April 3 (Reuters) - European shares were little
changed on Thursday as banks returned to the doghouse after a
two-day rally, offsetting the impact of buoyant commodity
shares.
At 0848 GMT, the FTSEurofirst 300 index <> of top
European shares was flat at 1,317.29 points, having risen more
than 4 percent over the past two sessions after a 16 percent
fall in the first quarter.
Banks were the top-weighted losers, with UBS <UBSN.VX>
falling 2.8 percent to give up some of its gains made earlier in
week when it announced a big writedown viewed as marking a
turning point in the bank's fortunes.
HSBC <HSBA.L> fell 1.3 percent, BNP Paribas <BNPP.PA> lost 1
percent and Royal Bank of Scotland <RBS.L> 2 percent.
U.S. stocks fell overnight after Federal Reserve Chairman
Ben Bernanke said that a recession was possible, but Asian
shares rose.
Strategists said there were still a lot of doubts around any
share recovery.
"We had an exceptionally weak first quarter and started the
second quarter with a strong rally, but there are clearly
question marks over whether the rally can sustain itself," said
Darren Winder, head of macro and strategy research at Cazenove.
"It depends on the next newsflow out of the financial
sector, and how it copes if the news is negative. Also, we need
to identify how much of the recession risk is priced in."
Euro-zone services growth slowed further in March as the
credit crunch tightened its grip, according to final data from a
survey of businesses, while price pressures hit a 10-month high.
AIR FRANCE TAKES OFF WITHOUT ALITALIA
Among other prominent gainers were Air France-KLM <AIRF.PA>
which rose 2 percent after its takeover of rival Alitalia
<AZPIa.MI> fell apart, and agrochemicals and seeds group
Syngenta <SYNN.VX> which gained 5.9 percent after raising its
earnings forecasts.
Miners rose, tracking precious metal prices. Anglo American
<AAL.L> rose 2.7 percent, Xstrata <XTA.L> rose 2.1 percent and
BHP Billiton <BLT.L> 1.8 percent.
Heavyweight energy stocks were also higher, with Royal Dutch
Shell <RDSa.L> up 1 percent and Total <TOTF.PA> up more than 1.5
percent. Oil fell to $104.22 a barrel but this was after a $4
surge on Wednesday.
Across Europe, Britain's FTSE <> was up 0.1 percent,
Germany's DAX <GDAXI> was down 0.25 percent and France's CAC
<> was up 0.1 percent.
With the corporate diary thin, investors were focusing on
euro zone retail sales, and ISM non-manufacturing data from the
United States, due later in the day, and U.S. non-farm payrolls,
due on Friday.
(Reporting by Sitaraman Shankar)
