Euro­pean shares fall af­ter slump in Nokia and Al­ca­tel

The Pak Banker - - MARKETS/SPORTS -

Euro­pean data shows shares fell, pulled lower by tele­com equip­ment stocks amid in­vestor dis­ap­point­ment over the terms of a deal be­tween Nokia and Sam­sung to set­tle a le­gal dis­pute. The pan-Euro­pean FTSEurofirst 300 in­dex, which fell 6 per­cent in Jan­uary in its big­gest monthly drop at the start of a year since 2008, dipped 0.38 per­cent to 1,344.75.

Ger­many's DAX and the euro zone's bluechip Euro STOXX 50 fell 0.4 per­cent and 0.8 per­cent re­spec­tively.

Shares in Nokia and Al­ca­tel -- which Nokia is in the process of ac­quir­ing -- slumped around 11 per­cent af­ter traders ex­pressed dis­ap­point­ment with the terms of Nokia's set­tle­ment of a pa­tent dis­pute with Sam­sung.

Among other fallers, the abrupt de­par­ture of Lux­ot­tica's third chief ex­ec­u­tive in 17 months sent shares in the glasses firm down 5.7 per­cent, and fu­elled con­cerns about strat­egy and the abil­ity of the group's 80-year-old founder to steer the com­pany in a more chal­leng­ing mar­ket.

"Lux­ot­tica's pre­dictable and sta­ble rev­enue base is not matched by its se­nior man­age­ment team," an­a­lysts at Bar­clays said in a note.

"Given the shake-up 18 months ago, we be­lieve this will be greeted with some scep­ti­cism by in­vestors." Traders said weak data from China, the world's se­cond-big­gest econ­omy, would also weigh on stock mar­kets.

It helped to put oil prices un­der pres­sure, af­ter they ral­lied to­wards the end of last week. The weak data from China and fad­ing hopes that OPEC might act to cut back sup­ply sent U.S. crude over 5 per­cent lower. The STOXX Europe 600 oil and gas sec­tor fell 1.4 per­cent, among top sec­toral fallers.

"Dis­ap­point­ment over the Chi­nese data will dampen sen­ti­ment. For the medium term, I would def­i­nitely look to sell out on any mar­ket ral­lies," said Han­tec Mar­kets' an­a­lyst Richard Perry. PMI sur­veys also showed a slow­down in fac­tory growth across the euro zone. Among ris­ers, Bankia gained 2.2 per­cent af­ter the state­con­trolled Span­ish bank re­ported higher prof­its.

Shares in Banco Popo­lare and other Ital­ian banks also rose af­ter the len­der said it ex­pected to agree a merger with Banca Popo­lare di Mi­lano within a month, sig­nalling the start of a long-awaited con­sol­i­da­tion of Italy's frag­mented bank­ing sec­tor.

France's Val­lourec rose nearly 8 per­cent af­ter the oil in­dus­try tub­ing maker saw a trad­ing halt lifted at noon, fol­low­ing the an­nounce­ment of an ex­ten­sive re­struc­tur­ing plan. Shares in the firm fell 14 per­cent in the pre­vi­ous ses­sion.

Mean­while, Euro­pean stock mar­kets were also seen steady as a rise in the shares of ma­jor banks such as Bankia off­set a fall in the tele­coms sec­tor af­ter Nokia set­tled a dis­pute with Sam­sung. The pan-Euro­pean FTSEurofirst 300 in­dex, whose 6 per­cent fall in Jan­uary was its worst monthly drop at the start of a year since 2008, rose 0.1 per­cent. Bankia rose 7.1 per­cent af­ter the state-con­trolled Span­ish bank re­ported higher prof­its. But shares in Nokia and Al­ca­tel -- which Nokia is in the process of ac­quir­ing -- slumped around 10 per­cent af­ter Nokia set­tled a pa­tent dis­pute with South Korea's Sam­sung.

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