November 20, 2014 / 4:17 PM / 3 years ago

European shares dip on weaker than expected euro zone macro data

* FTSEurofirst 300 down 0.5 pct, Euro STOXX 50 down 1 pct

* Oil services bounce back on Technip's offer for CGG

* Rejected CGG bid may open door for other suitors -fund manager

By Blaise Robinson

PARIS, Nov 20 (Reuters) - European shares fell on Thursday as weaker than expected euro zone manufacturing data reignited worries over the outlook for growth and caused a sell-off in Southern European stocks.

Shares in oil services companies, hammered as oil prices sank below $80 a barrel, bucked the trend as M&A activity fuelled expectation of consolidation in the struggling sector.

France's CGG jumped 23 percent on news of a 1.47 billion euro ($1.84 billion) takeover offer from larger rival Technip, a bid that CGG rejected.

The rally was fuelled by short-covering as hedge funds scrambled to unwind negative bets on the shares of CGG, one of the most shorted stocks across Europe, Markit data shows.

Technip shares fell 6.9 percent, while Fugro surged 5.6 percent, Saipem rose 4 percent and TGS gained 4.4 percent.

"It puts the spotlight on a sector which is at the start of a wave of consolidation, under pressure due to weakening oil prices. The rejected bid (on CGG) may open the door for other suitors," Barclays France fund manager Renaud Murail said.

At 1532 GMT the FTSEurofirst 300 index of top European shares was down 0.5 percent at 1,353.04 points.

Spain's IBEX was down 1.9 percent, hit in part by a 5.6 percent drop in shares of BBVA, which on Thursday set the terms of a rights issue to fund the raising of its stake in Turkey's Garanti

"It's a classic case of a drop in the shares of a company making an acquisition for which it will spend a lot of money," said Margarita Rivas, senior investment strategist at GVC Gaesco Valores in Madrid.

"But beyond that, I think that the market is still in an positive trend and the dip in the IBEX will be short-lived."

Hurting investor sentiment in the morning, data showed euro zone business growth has been weaker than any forecaster expected this month and new orders have fallen for the first time in more than a year despite further price-cutting.

In Asia, figures showed growth in China's vast factory sector stalled in November, with output contracting for the first time in six months.

European stocks have been oscillating in a tight range since late October as worries over the outlook for the global economy have been offset by a dovish tone from central banks.

Europe bourses in 2014: link.reuters.com/pap87v

Asset performance in 2014: link.reuters.com/gap87v

Today's European research round-up

Additional reporting by Alexandre Boksenbaum-Granier; Editing by David Goodman

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