By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stock markets traded lower in
early action on Tuesday as investors appeared to cash in on gains
seen from the prior session's rally. Broker moves weighed on shares
of RWE AG, Hannover Re SE and Munich Re, but lifted Burberry Group
PLC and Michelin.
The Stoxx Europe 600 index fell 0.3% to 287.52, following a gain
of more than 1% in the prior session, after upbeat economic data in
Europe and the U.S.
Fresenius Medical Care AG & Co. KgaA was the biggest
decliner, tumbling nearly 10%.
Utility company RWE shares fell 2.3% to 22.68 euros after Morgan
Stanley cut shares to equal-weight from overweight and cut its
price target to EUR28 from EUR36 a share. Analyst Bobby Chada cited
a tough operating environment and higher-than-expected leverage,
and said there is little scope for a power-price rebound.
Insurers were also in a negative spotlight. J.P. Morgan Cazenove
said it expects a 10% decline in natural catastrophe reinsurance
and sees flat rates on other reinsurer lines, and reduced its 2014
earnings-per-share estimates for key reinsurers. In light of this,
Hannover Re SE was cut to underweight from neutral, leaving shares
nearly 2% lower. Shares of Munich Re fell 0.8% as it was dropped to
neutral from overweight. Swiss Re AG fell 0.8% after being cut to
neutral from overweight.
The German DAX 30 index fell 0.4% to 7,955.32, dragged by Munich
Re and Fresenius.
On the upside, shares of Burberry Group PLC rose around 4% to
1,418 pence after HSBC lifted the luxury retailer to overweight
from neutral, and lifted its price target to 1,750 pence from 1,530
pence.
Those gains helped London keep losses in check, with the FTSE
100 index flat at 6,309.87.
Shares of Michelin added 2.4% after UBS upgraded shares to buy
from neutral, saying the tire company is only part of the way
towards improving its cost positions significantly. Analyst
Philippe Houchois also said its more-aggressive pricing on
light-vehicle tires is positive.
Those gains supported the French CAC 40 index , which kept
losses to a fall of 0.2% to 3,761.09.
Analysts said traders were growing cautious ahead of central
bank meetings in the U.K. and Europe on Thursday, along with
all-important U.S. payrolls data later this week. U.S. stock
futures pointed to gains for Wall Street later, while Australian
and Japan stocks rallied. China stocks fell.
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