FRANKFURT, April 17 (Reuters) - European shares fell on
Thursday, led lower by Nokia <NOK1V.HE> after the world's
biggest maker of mobile phones failed to impress investors with
its outlook, dragging down other technology and telecom stocks.
The pan-European FTSEurofirst 300 index <> closed down
0.6 percent at 1,295.32 points. The index had started the day in
positive territory, but turned by midday, mainly on Nokia's
results and outlook.
"It all started with Nokia. Nokia's sentiment leads the way
in Europe. And this also has an impact on telecoms stocks," said
Christian Stocker, equity strategist at UniCredit Global
Research.
Nokia shares fell 13.6 percent after it said it expects the
mobile market to fall in euro terms this year. The DJ Stoxx
European technology sector index <.SX8P> fell 6.3 percent and
the DJ Stoxx Telecom index <.SXKP> was down 1.7 percent.
Pharmaceutical shares were the second-weakest sector in
Europe, and the European pharmaceuticals sector <.SXDP> was down
1.5 percent mainly on disappointing results from Pfizer <PFE.N>
and Roche <ROG.VX>, which also weighed on AstraZeneca <AZN.L>
shares.
Banking shares bucked the trend and gained ground, helped by
expectations for a mortgage rescue plan by British authorities.
British lender Alliance & Leicester <ALLL.L> rose 1.4 percent
and HBOS <HBOS.L> gained 2 percent.
Royal Bank of Scotland <RBS.L> was the standout loser among
UK banks, falling 2.4 percent, as traders cited market
speculation about a possible rights issue. RBS was not
immediately available for comment.
Elsewhere Societe Generale <SOGN.PA> added 4.3 percent as
traders cited renewed talk that rival Credit Agricole <CAGR.PA>
could launch a takeover bid. Credit Agricole officials are not
immediately available for comment, and a spokeswoman of Societe
Generale declined to comment.
An upgrade from Goldman Sachs also helped the stock.
And across the Atlantic, Merrill Lynch & Co Inc <MER.N> rose
1.3 percent after the investment bank reported writedowns of
$6.5 billion in subprime mortgages and other risky debt, which
met analysts' expectations.
Analysts now await Citigroup's first quarter results on
Friday, due at 1030 GMT, according to Reuters data.
UniCredit's Stocker said: "We don't see a sustainable
recovery of banking stocks just yet. They might have a chance
for a lasting out-performance in the fourth quarter at the
earliest. But as long as the economy is not stable, as long as
there are no signs that recession fears are subsiding, we don't
see a chance for banks to lastingly outperform."
UniCredit rates banks with "neutral".
The DJ Stoxx European bank index <.SX7P> was up 0.1 percent.
The sector index has underperformed the European benchmark index
by about 13 percent since the beginning of the year.
THOMSON REUTERS STOCK FALL IN DEBUT
Around Europe, the UK's FTSE 100 index <> fell 1.1
percent, Germany's DAX index <> eased 0.3 percent and
France's CAC 40 <> inched up 0.2 percent.
Also on the upside, the DJ Stoxx European travel and leisure
index <.SXTP> rose 1.2 percent, lifted by French contract
catering and services group Sodexo <EXHO.PA>, whose shares rose
9.4 percent after it unveiled share buyback plans and posted
forecast-beating first-half profits.
Among major movers, shares of global information company
Thomson Reuters Corp <TRI.TO><TRI.N><TRIL.L><TRIN.O> fell in
their debut on Thursday on jitters over a financial industry
downturn. Its shares fell 14.6 percent in London, 7.4 percent in
New York and 5 percent in Toronto.
Analysts had expected the London-listed Thomson Reuters
shares to trade at a 15 percent discount to the Toronto shares,
citing the changing nature of the new company's shareholder base
and the unwinding of arbitrage trades that had bet on Reuters
shares rising to the Thomson offer price.
Oil stocks retreated after recent gains and as oil prices
dipped from record highs, with BP <BP.L> down 0.4 percent, and
Royal Dutch Shell <RDSa.L> down 1.1 percent.
Later in the evening, at 2200 GMT, Semiconductor Equipment
and Materials International will release its book-to-bill ratio
for March, which may have an impact on chipmakers such as
STMicroelectronics <STM.PA> or Infineon <IFXGn.DE> on Friday.
In the February report, the book-to-bill ratio was 0.93.
Everything below 1 shows that sales exceed orders.
(Reporting by Eva Kuehnen; editing by Elaine Hardcastle)
