April 25, 2016 / 8:37 AM / 2 years ago

European shares edge down further from three-month high

(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. See the bottom of the report for more details)

* FTSEurofirst 300 down 0.7 pct

* Germany underperforms after weak Ifo

* EDF drops on capital raising plans

* Philips sees possible lighting IPO drag on shares

By Alistair Smout

LONDON, April 25 (Reuters) - European shares edged lower on Monday, consolidating gains from a strong week which saw a top index touch a 3-month high, with a drop in French utility EDF weighing on the market.

The pan-European FTSEurofirst 300 index was down 0.7 percent at 1,362.58 points, and was 1.6 percent off from last Thursday’s peak, which was its highest level since January.

The index ended up 1.6 percent for the week, a second straight weekly gain, and followed Asian shares in seeing profit taking after a strong run.

Germany’s DAX was down 1.1 percent, the region’s underperformer, after German business morale fell in April.

The German Ifo Business climate index came in at 106.6 in April, missing a consensus forecast of 107.

Top faller on the FTSEurofirst 300 was EDF, which slumped 6 percent to 11.50 euros on a capital raising plan.

The French utility has delayed a decision on its Hinkley Point nuclear project, but in the meantime secured a state-backed financing package, which put pressure on the shares.

“We assume the capital increase will take place at a circa 15 percent discount to the share price,” said Exane BNP Paribas in a note, cutting its target price to 10 euros and reiterating an “underperform” rating on the stock.

“Our EPS estimates are lowered to reflect the dilution from the capital increase.”

Philips also fell, and was down 3.9 percent after its results. While results beat expectations, it said it was likely to float its lighting division in an initial public offering.

That disappointed some investors who had been hoping that the Dutch medical equipment and services company might be able to sell the unit.

Other top fallers were mining stocks, and the STOXX Europe 600 Basic Resources index was the top sectoral faller, down 2.6 percent, falling with the price of copper.

Oil and gas shares also dropped, down 1.3 percent, as crude prices pulled back after a strong three week run.

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.

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