Banking, travel stocks hurt European shares

lunes 30 de junio de 2014 08:21 GYT

* FTSEurofirst 300 index falls 0.2 percent

* easyJet falls on rating downgrade

* Banco Popolare falls on report on bad debt unit

By Atul Prakash

LONDON, June 30 (Reuters) - European shares edged lower in choppy trading on Monday, with easyJet leading the travel and leisure sector lower following a downgrade by a major investment bank and Banco Popolare putting pressure on the banking sector.

The European travel and leisure index fell 0.8 percent, pressured by easyJet. Shares in the budget airline slumped 5.8 percent, the top faller on the pan-European FTSEurofirst 300, with traders citing a rating cut by Bank of America Merrill Lynch to "underperform" from "neutral".

And Italy's fourth-biggest lender Banco Popolare fell 4.2 percent after its CEO Pier Francesco Saviotti told a newspaper the bank has cancelled the sale of its bad debt unit for now and it will look at merger opportunities once it has passed a Europe-wide health check of the sector.

"The market doesn't like this kind of news ahead of the upcoming stress test. If a bank is not able to find a buyer at the desired price, this leaves investors guessing about the quality of assets and whether further writedowns are necessary," Gerhard Schwarz, head of equity strategy at Baader Bank, said.

"The banking sector in general suffers from the lack of cyclical appetite investors currently have. The recent somewhat weaker economic numbers in Europe also cast some doubts that this recovery has a strong momentum. Banks are still suffering from structural weakness in their profitability."   Continuación...