Telecoms and miners weigh down European shares

European shares closed lower yesterday, snapping a four-day winning streak, weighed down by telecoms after disappointing results from Vodafone and mining stocks tracking weaker metal prices.

The pan-European FTSEurofirst 300 index of top shares closed down 0.2 per cent at 1,010.23 points.

The benchmark index has gained nearly 57 per cent since reaching a record low in early March and is up 21 per cent for the year.

Across Europe, the FTSE 100 index and Germany's DAX were both 0.1 per cent lower and France's CAC 40 was flat.

Major US indexes the Dow Jones industrial average, the S&P 500 index and the Nasdaq Composite were down 0.04 to 0.3 per cent.

"We have had a fairly uncertain day, sometimes positive and sometimes negative. The market has been fairly indecisive about which way it wants to go. Much of it hinges on the progress Wall Street makes," said Mike Lenhoff, a strategist at Brewin Dolphin.

"I don't know how confident people feel. I think in many ways they are overwhelmed by the fact the market has been so defiant in its progress."

Telecom stock featured among the biggest decliners. Vodafone slipped 1.5 per cent after the group's earnings margin declined 2.1 percentage points, due to tough competition in emerging markets such as India and a turnaround plan in Turkey.

Miners were on the downside after metal prices retreated. Anglo American, Antofagasta, Eurasian Natural Resources Corporation and Xstrata were down 1.4 to 2.5 per cent. Carmakers were also lower, with Volkswagen down eight per cent. Qatar plans to sell up to half its Volkswagen preference shares, cashing in on recent gains and raising around €1.6 billion for possible future deals. Volkswagen preference shares were down 15.8 per cent.

Banking stocks were in mixed. However, Europe's biggest bank HSBC gained four per cent after it said its underlying third-quarter profits were significantly ahead of a year ago and losses on US consumer loans had shown their first fall in three years.

Barclays, Credit Suisse and Banco Santander were down 0.7 to 5.1 per cent.

French insurer AXA rose 2.1 per cent as traders cited a flurry of positive analyst notes a day after the French insurer revealed a proposal to get full control of the Asian assets of its arm AXA Asia Pacific.

Analysts were less than positive about the index returning to higher levels. The broader DJ STOXX 600 was down 0.2 per cent lower at 245.31 points.

"The STOXX 600 is currently stuck in a range, with a support level at 241.79 and a resistance level at 250.46. But I'm cautious on the short term as we could soon get another correction phase," said Alexandre Le Drogoff, a technical analyst at Aurel BGC in Paris.

"If the 20-day moving average and 50-day moving average cross each other, it would mean that the recent trend reversal has more legs. This is something we're keeping an eye on."