|Europe stocks flat as weak miners offset BP, Shell|
|Wednesday, 30 April 2008|
REUTERS, PARIS - European stocks were flat on Tuesday, as a fall in mining shares along with metal prices overshadowed robust quarterly results from oil giants BP and Royal Dutch Shell.
Banks dipped, with UBS down 1.3 percent and Commerzbank down 1.4 percent, after Deutsche Bank unveiled more asset writedowns.
At 0847 GMT, the FTSEurofirst 300 index of top European shares was down 0.03 percent at 1,338.14 points. Declining shares outnumbered advancers by about two to one, compared with a ratio of seven to one in early trade. BP rose 4.8 percent and Royal Dutch Shell gained 4.3 percent.
Strong results at both companies helped boost Total, which gained 2.9 percent. Deutsche Bank lost 0.6 percent after posting its first quarterly loss in five years and saying it made further writedowns of 2.7 billion euros ($4.2 billion).
Mining shares were on the downside, with BHP Billiton down 2.3 percent, Rio Tinto down 2.5 percent and Anglo American down 3 percent. Investors were also cautious ahead of a key interest rate decision by the U.S. Federal Reserve on Wednesday and U.S. monthly jobs data on Friday.
A majority of economists forecast a 25 basis-point cut by the Fed, but the focus will be on the accompanying statement as investors look for insight on the outlook for the U.S. economy.
"There are a lot of key figures coming out this week on top of the Fed rate decision, so it's not exactly a good time to build positions before that," said Yann Lepape, economist at Oddo Securities.
"We're not done with negative macroeconomic data, and in particular on the jobs front. In the current context, it's clear that the correction on the stock market is not over yet.
We're having a technical bounce at the moment, as some market players believe in a 'v-shape' rebound, but this is not going to happen," Lepape said. Bearish remarks by influential investor Warren Buffett, who said the U.S. economy could face a long and deep recession, added downward pressure on the market.
Buffett's comments pushed U.S. stocks off their highs to close almost flat on Monday. After a sell-off in the first quarter, The FTSEurofirst 300 index has gained 6 percent so far in April, on track to record its best monthly performance since October 2003, as above-forecast corporate results have eased investors' fears about the impact of a US economic slowdown.
The index is still down about 11 percent on the year, hit by fears of recession and by a global credit crisis that forced banks to make huge asset writedowns and emergency capital increases.
Around Europe, Germany's DAX index was down 0.5 percent, Britain's FTSE 100 index, boosted by index-heavyweights BP and Shell, was up 0.5 percent and France's CAC 40 was down 0.2 percent.
Tyre maker Michelin tumbled 9 percent after the company slashed its forecast for 2008 operating income. European pharmas fell as a surprise rejection of Merck & Co's Cordaptive drug for raising "good" cholesterol sparked concerns of tougher US hurdles for new drugs.
AstraZeneca, Novartis and Sanofi-Aventis, which reports first-quarter results on Thursday, were down between 0.9 and 1.4 percent. On the macro front, investors will keep an eye on U.S. consumer confidence data for April, due at 1400 GMT.
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