Defensive weakness takes European shares off highs
* Euro STOXX 50 drops 0.4 percent
* Snam placing leads utilities lower
* Italy lags while Germany resilient at all-time highs
* Austrian, Nordic and Swiss stock markets shut for holiday
By Alistair Smout
LONDON, May 9 (Reuters) - European stocks slipped on Thursday as investors cashed in their recent gains on defensive shares, but technical support helped the market maintain its bullish tone and stay near recent multi-year highs.
The euro zone's Euro STOXX 50 index dropped 0.4 percent to 2,773.16 points, retreating from a near two-year high but finding support at an upwards trendline from lows hit on April 18.
The index has risen nearly 10 percent in the last three weeks and hit its highest point since July 2011 on Wednesday.
"It's natural to have a pullback after the gains we've seen. The fact that we found support to come off the lows suggests that there's still plenty of appetite in the market," said Matt Basi, sales trader at CMC Markets.
"It's a bull market, and people are quite happy to buy dips."
Defensive utility stocks fell 0.5 percent, the biggest sectoral faller on the STOXX Europe 600, led lower by a 5.1 percent fall in Italian gas transport company Snam after main shareholder Eni launched a placement at a discount to Wednesday's closing price.
Italy's blue chips lagged regional peers, down 1 percent, with Banca Popolare di Milano the top faller, slumping 8.9 percent on concerns that a plan to transform the cooperative bank into a joint-stock company could be delayed or even dropped.
Banks took nearly 100 points off the FTSE MIB, over half of its drop, as data showed bad loans at Italian banks grew in March at their highest annual rate since December 2011.
Outside Italy, UK stocks joined the day's top movers, with B Sky B sliding 6.2 percent on plans of rival BT to challenge the broadcaster by offering free British football matches to customers.
On the other hand, Experian, the biggest credit data company in the world, surged 6.4 percent after raising their dividend, announcing a share buyback and offering optimistic guidance for the coming year as they released annual results.
They were the top movers on the pan-European FTSEurofirst , which closed flat at 1,229.15 to stay near five-year highs, although it includes stocks from the Austrian, Nordic and Swiss markets, which were all shut for a holiday.
The gains in European shares in recent weeks have come on the back of continued monetary easing from central banks globally, including the European Central Bank's cutting of interest rates to record lows.
The German DAX set fresh record highs, outperforming peers to eke out a 0.2 percent gain.
"The DAX is being supported by stronger German data, and it's holding above the 8,200 level which indicates very strong upward momentum for the German equity market," Myrto Sokou, senior research analyst at Sucden Financial, said.
- Tweet this
- Share this
- Digg this
- Israel intensifies Gaza assault, Egyptians revise truce plan
- Obama says strains over Ukraine not leading to new Cold War with Russia
- In rare move, Canada accuses Chinese of trying to hack govt network
- Chinese police shoot dead dozens after attack in Xinjiang
- UPDATE 2-U.S. Senate shortens transport extension, sets up clash with House
Piramal Enterprises has tied up with Dutch pension fund APG Asset Management to invest $1 billion in Indian infrastructure companies over three years, in a move that would help indebted firms access funds to complete projects. Full Article