April 22, 2016 / 11:27 AM / 2 years ago

European shares weighed down by carmakers

* FTSEurofirst 300 falls 0.3 percent

* Automobile shares among top decliners

* Peugeot down after raid by investigators (ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). Updates prices)

By Atul Prakash

LONDON, April 22 (Reuters) - European shares fell slightly on Friday as automaker Daimler reported disappointing results and said it would investigate its U.S. emissions certification process.

Poor sales also hit luxury group Kering, owner of the Gucci brand.

The pan-European FTSEurofirst 300 index was down 0.3 percent by 1048 GMT, adding to a 0.3 percent fall in the previous session, although it was still headed for a second straight week of gains.

Carmakers were the worst performing sector. The European auto sector index fell 3.1 percent, dragged down by a 6.6 percent drop in Daimler after it reported first-quarter operating profit tumbled 9 percent.

Daimler also said the U.S. Department of Justice asked it to investigate its emission certification process in United States, including for its Mercedes brand.

Rival PSA Peugeot Citroen fell 2.7 percent after it was raided by anti-fraud investigators on Thursday as part of investigations into auto pollutants.

“The main reason that automotive stocks are down today are renewed emission investigations at Daimler, PSA Renault and Mitsubishi. So, as could be feared, the problem seems not to be limited to VW alone,” said Patrick Casselman, senior analyst at BNP Paribas Fortis.

Volkswagen AG announced an agreement on Thursday to buy back or potentially fix about half a million polluting diesel cars in the United States and set up environmental and consumer compensation funds. Its shares were down 3.2 percent.

Volkswagen is increasing provisions to pay for the emissions scandal to 16-17 billion euros, from 6.7 billion euros, a person familiar with the matter told Reuters on Friday. Volkswagen declined to comment on the matter.

French luxury group Kering was down 4.9 percent after its flagship Gucci brand posted a lower-than-expected rise in first-quarter sales on Thursday. The Kering group’s overall first-quarter sales also disappointed.

Finnish financial holding group Sampo fell 6 percent, the top decliner in the FTSEurofirst 300 index, after its shares traded without rights to its latest dividend payouts.

Shares in Zodiac Aerospace outperformed the market, surging 11 percent on speculation that Safran was interested in bidding for it, even though Zodiac said it was not for sale. A source close to Safran said an offer for Zodiac was “not on the agenda”.

Today’s European research round-up

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA. (Additional reporting by Danilo Masoni in Milan, Editing by Larry King and Susan Fenton)

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