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European Stocks Trim Early Losses But Finish Lower

European stocks remained in the doldrums Monday, unable to extend last week's minuscule gains amid warnings that the global economy is endangered by weak banks and surging oil prices.

"The G20 countries must now strengthen resilience to further shocks that could result from the still-fragile financial systems, high public and private debt, and higher world prices," International Monetary Fund Managing Director Christine Lagard warned.

Her comments came after the G20 failed to reach an agreement on boosting the firepower of the IMF.

The Euro Stoxx 50 index of eurozone bluechip stocks slipped 0.29 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, eased 0.20 percent.

The German DAX declined 0.66 percent and the French CAC 40 fell 0.47 percent The UK's FTSE 100 was down 0.58 and Switzerland's SMI lost 0.96 percent.

The major averages finished near their highest levels of the day, trimming big early losses in the final hours of trading.

Automakers were hit hard by concerns about surging gas prices. Daimler lost 3.5 percent, while BMW an Volkswagen were also weaker.

A gauge of major banking stocks dropped 1.4 percent amid fears that lenders will tap more European Central Bank funds than initially expected.

In London, Essar Energy dropped 15 percent after turning to a loss for the first half of the year.

Associated British Foods was down 1.5 pecrent. The Primark owner expects that first-half earnings per share will be slightly higher than last year.

Pearson lost 3.9 percent. The publisher expects to achieve continued sales and profit growth in 2012 after reporting a 72 percent surge in 2011 pre-tax profit.

HSBC eased 3.9 percent. The lender expects a more moderate growth in fiscal 2012, after posting a 15 percent increase in pre-tax profit for fiscal 2011.

Vedanta lost 1.3 percent after announcing the merger of its Indian units.

BP rose 1.25 percent after the oil giant said the U.S. District Court has adjourned the start of the oil spill litigation trial by one week. Bloomberg reported that BP and the plaintiffs are discussing a $14 billion settlement deal.

Bunzl rose 2.7 percent after the distribution and outsourcing group reporetd increased annual adjusted profit and hiked its dividend.

A.P. Moeller- Maersk A/S lost ground after saying that its container division will make a loss this year.

A leading indicator of the Eurozone economy increased for the second consecutive month in January, data from a survey by Conference Board showed Monday. The leading economic index increased to 104.1 in January from 103.1 in December.

Pending home sales in the U.S. rose by more than expected in the month of January, according to a report released by the National Association of Realtors on Monday, with the pending home sales index rising to its highest level in almost two years.

NAR said its pending home sales index rose 2.0 percent to 97.0 in January from a downwardly revised 95.1 in December. Economists had been expecting to index to increase by about 1.5 percent.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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