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European shares fall as tensions over Syria rise
August 27, 2013 / 8:08 AM / 4 years ago

European shares fall as tensions over Syria rise

* FTSEurofirst 300 down 0.9 pct, Euro STOXX 50 down 1.1 pct

By Blaise Robinson

PARIS, Aug 27 (Reuters) - European stocks fell in early trade on Tuesday as unease about the threat of a military strike against Syria prompted some investors to cash in on recent strong gains.

Mining shares featured among the top losers, falling after copper group Antofagasta posted a sharp drop in profits, hurt by rising costs and lower metal prices. Its shares fell 2.7 percent, while Rio Tinto was down 1.9 percent and Anglo American down 0.9 percent.

At 0801 GMT, the FTSEurofirst 300 index of top European shares shed 0.9 percent at 1,212.34 points, while the euro zone’s blue-chip Euro STOXX 50 index fell 1.1 percent to 2,789.98 points.

“The market has gone up a bit fast lately, and a lot of fund managers have already reached their targets for the year, so it’s tempting to book profits now that geopolitical risks are rising,” said Philippe de Vandiere, analyst at Altedia Investment Consulting, in Paris.

The Euro STOXX 50 has surged 13 percent since late June, outpacing Wall Street’s S&P 500, up 6 percent over the same period.

De Vandiere said portfolio managers were switching from stocks exposed to emerging markets into more domestically-focused one.

The United States signalled on Monday possible military action against Syria over a chemical weapons attack last week it said it believed President Bashar al-Assad was responsible for.

“An escalation in geopolitical tension is not good for investor sentiment. People might just be waiting for some clarity before they look to react,” Keith Bowman, equity analyst at Hargreaves Lansdown, said.

Italian shares reversed part of recent sharp losses on Tuesday, with the FTSE MIB up 0.3 percent after 2.1 percent drop in the previous session due to fears the country’s simmering political crisis could bubble over.

On the economic front, markets showed little reaction to Germany’s IFO business climate index for August, which came in slightly ahead of expectations.

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