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* LiveMarkets: cpurl://apps.cp./cms/?pageId=livemarkets
* STOXX down 0.2 percent, weighed down by miners, financials
* Monte Paschi ends at record low on state rescue prospects
* Actelion surges to record on J&J talks
* M&A stories help Inchcape, Ontex
By Danilo Masoni and Alistair Smout
MILAN/LONDON, Dec 22 European shares fell
slightly in thin pre-holiday trade on Thursday, as mining and
financial stocks weakened, while the likelihood of a state
rescue sent Italian lender Monte dei Paschi to a fresh
The STOXX 600 fell 0.2 percent, falling for a
second straight session, but remained close to its highest level
since Jan. 4 reached on Tuesday.
Monte Paschi fell 7.5 percent at its lowest closing level
since it listed in 1999. Italy's third-largest bank and the
world's oldest failed to find an anchor investor for its private
rescue plan on Wednesday, making a state rescue look inevitable.
"The various attempts to recapitalise the bank through the
private sector have failed and the state is now likely to step
in," said Aberdeen Asset Management fund manager Rahul Kalia.
Sources familiar with the matter said the Italian government
would meet late Thursday or early Friday to discuss an emergency
decree to bail out the bank, which warned this week it could run
out of liquidity in four months.
Monte Paschi has been in crisis for years and investors
appeared to anticipate a solution, averting risks of contagion
across the banking sector. The salvaging of Monte Paschi would
be part of a 20 billion euro ($21 billion) safety net set up by
the Italian government.
While Monte Paschi has slid, European bank shares overall
have rallied strongly over the past two weeks, helped by
expectations of easing regulatory pressure and rising bond
yields, which help them make more profits.
"European banks remain undervalued and the worst has already
been priced in," Enrico Vaccari, fund manager at Italy's
Europe's bank index, which touched its highest in
more than 11 months earlier in December, fell 0.6 percent as
investors took profits following the recent rally.
Miners were the biggest sectoral fallers, down 1
percent as copper hit a 1-month low. The sector remains up 59
percent for the year, however.
Actelion surged to a new record high after the
Swiss drugmaker entered exclusive discussions with prospective
bidder Johnson & Johnson, in an about-turn that appeared to
sideline rival suitor Sanofi.. Actelion
rose 4.1 percent and Sanofi added 1 percent.
M&A stories supported other stocks, with Ontex
rising 3.5 percent after confirming discussion of a possible
acquisition of Hypermarcas in Brazil, while Inchcape
jumped 7.8 percent after buying a distribution business in South
But Nokia fell 4.9 percent after it said it had
filed a number of lawsuits against Apple for violating
Despite Thursday's losses, the STOXX 600 is up more than 5
percent in December, and set for its biggest monthly rise since
($1 = 0.9576 euros)
(Reporting by Danilo Masoni; Editing by Ruth Pitchford)