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European Stocks End Lower
Monday May 9, 12:47 pm ET
By Kabir Chibber
European Stocks End Lower After a Broker Downgrade to the Utilities Sector


LONDON (AP) -- Shares in Europe edged lower Monday after a broker downgrade to the utilities sector, while progress was seen in international banking deals as Barclays PLC and ABN Amro Holding NV each won regulatory approvals.
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Germany's benchmark DAX 30 index slipped 0.4 percent to 4,292, while France's CAC 40 Index declined 0.3 percent to 4,020. London's FTSE 100 index fell 0.2 percent to 4,910, unaffected as the Bank of England held interest rates at 4.75 percent for the ninth month in a row, as was widely expected.

German utilities RWE AG and E.On AG declined after Morgan Stanley downgraded its stance on the sector to cautious.

"Following an extended period of outperformance, we see no upside on a total return basis except for a small number of large caps," the broker said.

France's Suez SA and Veolia Environnement SA shares also eased on the day.

British bank Barclays PLC rose 0.4 percent as it announced that it has agreed to buy a majority stake in Absa Group Ltd. for about 33 billion rand (US$5.5 billion; euro4.3 billion).

Rival bank HSBC Holdings PLC added 0.2 percent as it announced subsidiary HSBC Insurance Holdings Ltd. will pay US$1.1 billion (euro858 million) to double its 9.91 percent stake in China's No. 2 insurer Ping An Insurance (Group) Co. of China Ltd.

ABN Amro Holding NV slipped 0.5 percent as the Bank of Italy approved the Dutch bank's proposed bid for Italian bank Banca Antonveneta.

Deutsche Boerse AG shares added over 2 percent as it said Werner Seifert was resigning as CEO of the German stock exchange. The exchange faced heavy shareholder opposition for its proposed bid for the London Stock Exchange PLC. Deutsche Boerse said Seifert's successor will come from outside the company. The search will be led by Chairman Rolf Breuer.

Shares in aerospace and defense group EADS SA, which owns 80 percent of Airbus, were up 0.2 percent as it said net profit rose to euro328 million (US$425 million) from euro49 million a year earlier. The closely watched earnings before interest and taxes figure more than tripled to euro657 million (US$851 million) from euro198 million, before goodwill impairment and exceptional items. Revenue at EADS, the rival to Boeing Co., rose 16 percent to euro7.01 billion (US$9.08 billion).

German reinsurer Munich Re weakened after saying its first-quarter net profit increased 27 percent, boosted by the sale of stakes in a German mortgage bank and a truck maker. The reinsurer said it was too early to make a forecast on 2005 earnings.

German mail delivery group Deutsche Post AG, which owns DHL Express delivery service, slipped 1.3 percent after it said first-quarter net income rose 2 percent to euro455 million (US$589 million). Revenue fell to euro10.52 billion (US$13.62 billion) from euro10.57 billion a year ago.

U.K. retailer Kingfisher PLC jumped 5.4 percent to be the biggest gainer in the FTSE 100. The bank reportedly dismissed a newspaper report that it has discussed a possible takeover of Home Depot Inc., the world's largest DIY retailer. Company officials weren't available to comment.

Troubled German retailer KarstadtQuelle AG added 1.8 percent as German newspaper reports said the family of Madeleine Schickedanz, its biggest shareholder, has raised its stake to over 50 percent from 42 percent.

German household products group Henkel KGaA surged 4.2 percent, leading gainers in the DAX 30, as Deutsche Bank upgraded the maker of Dial soap to buy from hold.

Kabir Chibber is a correspondent of Dow Jones Newswires.





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