European shares end lower

European shares ended slightly lower yesterday, as mining stocks retreated from recent highs and as weak housing data from the United States rattled sentiment in building materials companies.

Spanish bank BBVA was a top faller, down 0.5 per cent after it agreed to buy US bank Compass Bancshares for $9.6 billion.

The pan-European FTSEurofirst 300 index ended down 0.13 per cent at 1,544.03 after hitting a six-year high of 1,550.2 in the previous session.

Britain's FTSE 100 dipped 0.2 per cent, the German DAX fell 0.02 per cent and the French CAC 40 declined 0.13 per cent.

Shares in building materials companies fell after the US government said the pace of US home construction last month suffered the sharpest drop since October.

French glassmaker Saint Gobain lost 0.6 per cent while building materials company Lafarge dipped 0.7 per cent.

In Britain, shares in the world's largest distributor of plumbing supplies, Wolseley lost one per cent. Its shares rallied on Wednesday on takeover speculation.

"I'm not surprised by the housing data, it confirms my cautious stance," said Jan Leroy, a fund manager at Petercam Asset Management, adding that the sector had likely run ahead of itself. Mining stocks crowded the list of top fallers, with Anglo American down 1.3 per cent and Rio Tinto off by 1.2 per cent.

"If there's any sluggishness in the housing market, you'll begin to see weaker copper prices, for example," Mr Leroy added.

Shares in car maker DaimlerChrysler were among the top winners, extending gains earlier this week on the back of its restructuring efforts.

A report in Automotive News that rival General Motors was in talks to buy Daimler's US arm Chrysler helped lift the shares 1.3 per cent.

Shares in Credit Suisse also extended gains, adding 1.9 per cent to Thursday's rise triggered by news of bumper results and a new chief executive.

But Diageo shares dropped 0.7 per cent a day after the world's biggest alcoholic drinks group posted an eight per cent rise in first-half earnings and raised its full-year growth guidance, sending its shares to a record high.

"The United States is the group's largest source of profits. Therefore, the share price would be vulnerable to a material slowdown in consumer confidence in the United States, any weakness in the dollar or an increase in Federal Excise Tax," Deutsche Bank wrote in a research note.

On Wall Street, the Dow Jones industrial average was down 0.1 per cent, while the Nasdaq Composite Index was down 0.2 per cent.