April 25, 2016 / 4:31 PM / in 2 years

European shares knocked down by falls at EDF and banks

(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 closes down 0.6 pct

* EDF slumps on capital raising plans

* Philips sees possible lighting IPO drag on shares

By Alistair Smout

LONDON, April 25 (Reuters) - European shares fell further below last week’s three-month high on Monday, as a slump in French utility EDF and weaker banking stocks pushed the market lower.

The pan-European FTSEurofirst 300 index, which hit a three-month peak last week, fell 0.6 percent to 1,364.13 points.

The biggest decline on the FTSEurofirst was EDF’s 11.1 percent loss.

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

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

Major banks such as Standard Chartered and Deutsche Bank also slid lower, with analysts expecting a weak set of first-quarter earnings from many of them.

Philips also fell 4.3 percent after its first-quarter results. Profit beat expectations, but Philips said it was likely to spin off its lighting division in an initial public offering.

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

Mining stocks also fell, with Anglo American and BHP Billiton dropping 7.3 percent and 5.8 percent respectively, as the price of copper weakened.

Oil and gas shares also weakened, as crude prices pulled back after a strong three-week run.

The FTSEurofirst 300 index remains down by around 5 percent since the start of 2016.

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. (Editing by Richard Balmforth)

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