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European shares head for sixth week of losses

Published 06/10/2011, 05:44 AM
Updated 06/10/2011, 05:48 AM

* FTSEurofirst 300 falls 0.1 pct; down in 7 of 8 sessions

* Miners, automobile shares feature among the top losers

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, June 10 (Reuters) - European shares fell on Friday on persistent concerns about the pace of global economic recovery, though stocks pared losses after the German parliament voted in favour of a motion to approve new aid for Greece.

At 0923 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was down 0.1 percent at 1,103.09 points after rising as high as 1,104.02 earlier in the session. The index rose 0.9 percent in the previous session following six days of declines. It is down 0.8 percent so far this week.

The STOXX Europe 600 basic resources index <.SXPP> fell 0.4 percent, tracking declines in copper prices that dropped after Chinese trade data showed a surprising fall in copper imports. Telecom shares <.SXKP> were down 0.7 percent.

"Markets are still in a defensive state of mind. A series of disappointing economic figures, especially coming out of the U.S., bring back memories of the slowdown we saw last summer," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

"Even though in our base scenario we still believe that this is a temporary slowdown and that economic growth will pick up later in the year, the markets will continue to be nervous and volatile in the meantime."

A series of U.S. economic data releases in the past days, including the latest payrolls report, have hurt sentiment. Investors are also cautious as the U.S. Federal Reserve's $600 billion second round of stimulus expires at the end of June.

"Long-onlys are playing at the edges and they are not doing a lot. Mostly their orders are made up of small-cap and mid-cap companies only. You have got worries about the U.S economy and you have got the Greek situation," said the head of investment dealing at a fund, which manages about $80 billion.

"If the Greek problem gets resolved then the market will have a sharp rally."

DEBT CRISIS

The German parliament passed a non-binding resolution, which was proposed by members of parliament from Chancellor Angela Merkel's Christian Democrats, their Bavarian sister party Christian Social Union and their Free Democrat coalition partners. [ID:nB4E7H6010]

German Finance Minister Wolfgang Schaeuble said before the vote that private creditor participation in a new package for the heavily indebted euro zone member was "unavoidable".

Austria said it will only help Greece if the International Monetary Fund continues to do so, while the European Central Bank said on Thursday it opposed forcing private creditors to take part in debt relief for Greece. Financial stocks turned positive after early declines and volumes were high. The STOXX Europe 600 banking index <.SX7P> was up 0.3 percent, while Greek banks <.FTATBNK> were up 1.7 percent. Greek shares <.ATG> rose 1 percent.

Among individual movers, French luxury group Hermes fell 4 percent, its biggest drop in six months, after LVMH denied reports the company was planning a takeover bid for its smaller rival.

Nokia was up 0.8 percent. The company said it was still in talks with "multiple parties" about its stake in Nokia Siemens Networks, after a report that U.S. private equity firms had backed away from bidding for a majority stake. (Editing by Sophie Walker)

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