Fiat downgraded at J.P. Morgan; Carlsberg cut at Credit Suisse
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares pulled back from early gains on Thursday as miners reversed course, offsetting gains from drugmakers and food producers.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP 256.73, +0.43, +0.17%) traded flat at 256.23.
Healthcare firms and food producers, more defensive plays, were gaining ground, with AstraZeneca (UK:AZN 3,126, +72.50, +2.37%) (UK:AZN 3,126, +72.50, +2.37%) shares up 2.4% after it was upgraded to overweight at Morgan Stanley and Nestle (CH:NESN 50.80, +0.55, +1.09%) shares up 1.5%.
The AstraZeneca upgrade was made in anticipation of cuts in research spending.
Worries that Chinese interest rate tightening will choke off growth in that country hit miners hard in Europe on Wednesday and the sector couldn't hold on to early gains on Thursday, with Rio Tinto (UK:RIO 3,397, -62.41, -1.80%) (RTP 220.28, -8.84, -3.86%) shares down 2.5%. Read more on China GDP.
Additionally, European data out Thursday showed that private-sector output growth in the 16-nation euro zone slowed in January. Read more on European data.
The euro declined 0.3% to $1.4056 against the dollar also after a report that Greece's budget deficit could be revised up to between 13% and 15% of GDP.
Greek banks led another sharp selloff for Greek stocks, with the ASE Composite Index down 2.8% at 1,973.29. EFG Eurobank shares fell 6.1%, National Bank of Greece (NBG 4.60, -0.05, -1.08%) shares dropped 5.2% and Piraeus Bank shares were down 4.9%.
The major regional indexes fared better. The U.K. FTSE 100 index (UK:UKX 5,432, +10.93, +0.20%) rose 0.1% to 5,427.89, the German DAX index (DX:DAX 5,880, +29.44, +0.50%) climbed 0.2% to 5,864.94 and the French CAC-40 index (FR:PX1 3,954, +24.98, +0.64%) rose 0.4% to 3,944.94.
U.S. stock futures were slightly lower. Goldman Sachs' earnings are due out later on Thursday.
TomTom (NL:TOM2 5.52, -1.08, -16.34%) shares dropped 9.3% after Nokia (FI:NOK1V 9.16, -0.10, -1.03%) (NOK 13.00, -0.24, -1.81%) said on its Web site that it will offer navigation on its handsets for free -- and unlike a comparable service from Google (GOOG 583.00, +2.59, +0.45%) , the navigation will not require an Internet connection. Read more on TomTom.
Shares of Fiat (IT:F 10.28, -0.12, -1.15%) fell 1.1% after the firm was downgraded by J.P. Morgan to underweight from neutral, noting it has the lowest upside to estimates and valuations are line with historical averages.
Carlsberg, down 1%, was cut to underperform from neutral by Credit Suisse. The broker cited a tripling of the Russian excise duty, destocking from a 2009 year-end stock up, a possible ban of sales through the kiosk channel, which makes up 20- to 30% Carlsberg's Russian volumes, or at the least restrictions on sales from kiosks, and tough pricing comparisons.
Shares of no-frills airline easyJet (UK:EZJ 380.60, +16.50, +4.52%) rose 5.1% after it said that, in the three months to Dec. 31, its total sales rose 10.5% to 607.5 million pounds.
