European stocks end down, well above day's low

By Blaise Robinson

PARIS, April 10 (Reuters) - European stocks ended lower for the third straight session on Thursday but well off the day's lows, as strong gains on Wall Street sparked a late recovery eclipsing fears of more asset writedowns in the banking sector.

Novartis (NOVN.VX: Quote, Profile, Research) fell 2.8 percent and Roche (ROG.VX: Quote, Profile, Research) lost 1 percent, both hit by news that U.S. health regulators are investigating whether two transplant drugs made by the companies could be linked to a rare central nervous system disorder.

The FTSEurofirst 300 index of top European shares closed 0.4 percent lower, at 1,303.53 points, after falling to as low as 1,286.14. The index, down 13 percent on the year, has risen nearly 9 percent since reaching a multi-year low in mid-March.

"The market is hanging on as a number of stocks that were slaughtered are now recovering. Is it a new upward trend? We're not quite sure at this point," said Valerie Plagnol, chief strategist at CM-CIC Securities, in Paris.

"We have the feeling that stocks have already priced in a lot of negative economic news, and that worries over liquidity are easing after the bailout of Bear Stearns. It sent a message that central banks won't let things get worse."

Mining stocks dropped after BHP Billiton (BLT.L: Quote, Profile, Research) said it was unaware of any plans by China to buy shares in it. BHP fell 2.6 percent while Antofagasta (ANTO.L: Quote, Profile, Research) shed 2.3 percent, and Rio Tinto (RIO.L: Quote, Profile, Research) dropped 1.6 percent.

British Energy (BGY.L: Quote, Profile, Research) was the top gainer in Europe, up 5.4 percent after sources close to the matter said Germany's RWE (RWEG.DE: Quote, Profile, Research) and Britain's Centrica (CNA.L: Quote, Profile, Research) had both made indicative bids for the group. All three companies declined to comment.

Energy stocks got a boost from buoyant crude prices, which retreated after flirting with record highs. BP (BP.L: Quote, Profile, Research) gained 0.8 percent, and Royal Dutch Shell (RDSa.AS: Quote, Profile, Research) was up 0.4 percent.