European stocks fall in lacklustre trade

European shares dipped yesterday, paring last week's gains, with a fall in ABN AMRO and oil shares weighing on markets, while a UK holiday restricted activity.

ABN AMRO lost 2.4 per cent as some market participants said a $24.5 billion offer for the Dutch bank's US bank LaSalle from a consortium led by Royal Bank of Scotland was below expectations and ABN AMRO's takeover still remained uncertain.

By 0840 GMT, the DJ Euro Stoxx 50 index was 0.2 per cent weaker at 4,436.6. The pan-European FTSEurofirst 300 index shed 0.1 per cent to 1,592.6 after earlier rising to 1,596.8, its highest since December 2000, for a gain of more than seven per cent so far this year. The FTSEurofirst index rose nearly two per cent last week on a boom in mergers and acquisition activity and robust results.

Around Europe, France's CAC 40 index was down 0.1 per cent. Analysts said Conservative Nicolas Sarkozy's comfortable presidential election win was likely to appeal to reform-hungry French markets. Germany's DAX was steady.

ABN topped European losers yesterday. "The approach for LaSalle was largely expected, though the price could have been pitched higher to ensure the knockout blow," analysts at Fox-Pitt, Kelton said in a note. "Given the determination of Barclays and RBS we still anticipate a drawn out battle between RBS and Barclays which could see the bids rise in a tit-for-tat exchange." The RBS-led group is trying to beat out a $88 billion offer by Barclays for the Dutch bank announced two weeks ago, along with the related deal to sell LaSalle to Bank of America.

Volume in the most actively traded European stocks, including Ericssson and Telecom Italia, was sharply below daily average volumes.

Shares in Total lost 0.8 per cent and Eni dipped 0.7 per cent. Brent crude oil prices were steady at $65.3 a barrel after a week-long retreat after increased US crude inventories alleviated worries of a fuel shortfall in the world's top energy consumer.

Puma shed 0.4 per cent after the German sportswear maker lowered its 2007 forecasts as it reported nearly flat first-quarter earnings. Puma's shareholders are weighing a takeover offer from French luxury goods retailer. Earlier, Asian shares ended higher. Markets are keeping a close eye on interest rates with the Federal Reserve, European Central Bank and Bank of England all meeting this week.