Euro stocks dive to 13-month low

(Fin24) - European stocks fell to their lowest since December 2006 by midday on Friday, tracking a drop in US futures on renewed worries over the troubled subprime mortgage market, with consumer product shares hurt by brokerage downgrades.

Unilever sank 5% after Morgan Stanley cut its recommendation to "underweight". France's L'Oreal, the world's largest cosmetics group, tumbled 4.8% after Deutsche Bank lowered its rating to "sell", citing mounting pressure on margins from rising commodity prices and risks of a slowdown in consumer spending.

At 1255 GMT, the FTSEurofirst 300 index of top European shares was down 0.5% to 1 429.15, after falling to as low as 1 420.90 - retreating for the sixth time in eight sessions.

After posting a thin 1.6% gain in 2007, its worst annual performance since 2002, the index has already lost 5.1% in 2008, hammered by mounting worries over the prospect of a US recession.

"The market is in the process of pricing in a US recession, turning into bear mode, with more forecast downgrades looming," said Jean-Luc Buchalet, strategist at FactSet in Paris.

"Defensive stocks have been showing some resilience, such as telecoms and pharmaceuticals, while all the other sectors are just sinking," he said.
 

 

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No fresh Vodacom bid for GT

(FIN24) - Vodacom, SA's biggest mobile network, operator has not tabled a fresh offer for a controlling stake in Ghana Telecoms (GT) but couldn't rule out adding a sweetener to its initial $500m (R3.5bn) bid.

"I've read reports from Ghana to that effect [of a higher offer]," said Dot Field, head of group communications at Vodacom. "But the fact is that we have not tabled a fresh offer for GT."

She added, however, that Ghana remained a market in which the group was "firmly" interested... as indicated in our annual report".

Initial bids for a 51% stake in GT were rejected by transactional advisors who argued that they were way below the government's asking price. Bidders included Portugal Telecom and France Telecoms.
 

 

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Withering food stocks send European shares lower

(Reuters) - European shares ended down on Friday after briefly touching their lowest level since December 2006, led by weaker food and beverage stocks, as concern the U.S. subprime crisis was far from over darkened investors' mood.

Among major movers, Unilever Plc/NV (UNc.AS: Quote, Profile, Research) fell 5 percent following a Morgan Stanley downgrade of the consumer goods giant, dragging down others in the sector.

The DJ Stoxx European food and beverage index fell 3.8 percent, marking its worst sell off since June 2003, with Nestle (NESN.VX: Quote, Profile, Research) declining 4.3 percent, Danone (DANO.PA: Quote, Profile, Research) 3.2 percent lower, and Pernod Ricard ( PERP.PA: Quote, Profile, Research) down 4.1 percent.

The pan-European FTSEurofirst 300 index closed down 0.55 percent at 1,428.89 points, regaining some ground after touching the mark of 1,420.90, its lowest since early December 2006. It closed down 1.9 percent on the week.

"We had a year-end party and now we've got a proper hangover," said Susanne Lahmann, equity strategist at German bank Bremer Landesbank.

 

Read more at Reuters