European shares finished lower yesterday, despite surging drug-maker shares, led by a slide in Gaz de France stock after the French government prevented the utility from raising tariffs, triggering broker downgrades.
Pharmaceutical shares such as AstraZeneca rose after a federal judge upheld the validity of two key US patents on Pfizer's Lipitor cholesterol drug, limiting losses on European markets and boosting the Swiss bourse.
Basic resources shares also firmed as gold rebounded after last week tumbling from near-25-year highs, with Rio Tinto gaining 1.5 per cent, while a weaker oil price softened producers' shares, with Total down 0.7 per cent.
The pan-European FTSEurofirst 300 index closed down 0.12 per cent at 1,266.93 points, after ending at a 44-month high on Friday.
Among the top gainers were Italian banking stocks such as Banca Popolare di Milano, Banca Intesa and Banca Popolare Italiana, all up between 2.8 per cent and 5.6 per cent after Bank of Italy Governor Antonio Fazio resigned following intense pressure over his handling of banking takeovers this year.
"The market is betting that now, without Fazio, there could be more room for mergers and stake-building," said Manlio Bonafede, fund manager at Banca Leonardo SGR in Milan.
Drug makers AstraZeneca and rivals such as Sanofi-Aventis and GlaxoSmithkline were strong gainers from the US patents case.
"We anticipate that the US and European sectors will enjoy a modest expansion of P/E multiples as the view is likely taken that the security of primary patents is more robust than feared. This could see the US and European sectors gain two to three per cent," Credit Suisse First Boston said in a research note.