European shares end down

European shares finished lower yesterday in consolidation of earlier gains and as anxiety over rising interest rates bumped Wall Street into the red after weaker-than-expected US jobs data, which the market took in its stride.

Heavy losers included UK satellite broadcaster BSkyB, which plunged 4.8 per cent after subscriber numbers disappointed, and Swedish security firm Securitas, which fell 4.5 per cent after a disappointing third quarter.

On the upside, German utility RWE rose three per cent after it said it would sell RWE Thames Water plc and American Water Works Company Inc., estimated to be worth up to €16 billion, to focus on its core power businesses.

Europe's benchmark FTSEurofirst 300 index closed down 0.2 per cent at 1,221 points. Germany's DAX underperformed, losing 0.3 per cent to 4,995.2 points.

Commentators said European markets were consolidating after the previous session's hefty gains on upbeat US business data and strong earnings reports. They said any share weakness offered a buying opportunity.

"I would say that this is definitely consolidation. I was very pleased with the productivity numbers and had hoped for a follow through today," said Lex Werkheim, an asset manager at Eureffect in Amsterdam. Strong earnings from oil major Total and a successful capital increase by sports firm Adidas supported sentiment and limited weakness, but Total gave up most of its gains in afternoon trade as the oil price turned lower.

The crude price softened slightly to sit above $61 a barrel as mild weather dampened hopes for a rise in heating fuel demand. Meanwhile, US stocks fell on concerns about higher interest rates as the yield on the benchmark bond crept closer to a 16-month high.

"Long-term interest rates are moving higher, which is eventually going to hamper the market," said Stephen Massocca, head of trading and president of San Francisco-based investment bank Pacific Growth Equities. "Although you've got oil down today, there were hopes that it would be sustained in the 50s, and that hasn't happened," he added. Data showed 56,000 new US jobs were created last month, fewer than expected despite the fading impact of Hurricane Katrina, and total job growth over the two prior months was revised lower.

Wall Street economists had forecast that 100,000 jobs would be created last month and the unemployment rate would be unchanged. The US national unemployment rate eased to five per cent from 5.1 per cent in September as the national labour force shrank for the first time since January.

The Dow Jones industrial index was weaker.

Among the leading gainers was electronics company Thomson, which surged 3.6 per cent. Dealers said its valuation had been boosted by a New York Post article that said rival Scientific-Atlanta Inc. could be worth more than $4 billion if sold, a higher price than expected.

The cost of insuring debt in Thomson against default jumped as credit investors worried about a potential leveraged buyout (LBO) of the French electronics company that would load its balance sheet with debt, dealers said.

Amvescap climbed 2 per cent after speculation gathered pace that US fund manager Janus may bid for the firm and as investment bank UBS upgraded its stance on the stock.

Adding to more positive market sentiment after last month's sell-off was news that German sporting goods firm Adidas had successfully raised €648 million in an oversubscribed capital increase to help finance its planned $3.8 billion takeover of US rival Reebok.

"The fact the placement went so well is a sign of strength for that company," Mr Werkheim said.

Adidas shares were one per cent higher. Meanwhile rival Puma rose 2.4 per cent thanks to solid quarterly earnings and higher forecasts.