European stocks dip on debt worries
London - European shares slipped on Friday, with investors cautious as concerns grew about the eurozone peripheral debt crisis, while AstraZeneca's dropped as a key drug failed to win US approval.
By 09:57 am, the pan-European FTSEurofirst 300 index of top shares was 0.1% lower at 1 129.98 points after rising 0.4% in the previous session.
"There is still ongoing work to be done on the European Union crisis mechanism, I think once you start looking at the details, that is when the difficulties start to come in," Jeremy Batstone-Carr, head of equities at Charles Stanley, said.
"Investors want to know about the size of it, what the terms are and who will contribute."
European Union leaders have agreed to create a permanent financial safety net from 2013 and the European Central Bank said it would nearly double its capital to €10.76bn to cope with bigger credit risk.
Batstone-Carr also said to be wary about reading into what is going on in the market because there is triple witching, when contracts for stock index futures, stock index options and stock options all expire at the same time.
"I think a lot of investors would prefer to get out rather than get involved right now," he added.
Banks, which have been hard hit by the eurozone sovereign debt crisis, were under pressure after Moody's Investors Service slashed Ireland's credit rating by five notches to Baa1 from Aa2.
Bank of Ireland slumped 6.7%, while Barclays, Credit Agricole and Lloyds Banking Group fell 0.7% to 1.1%.
On Thursday the ratings agency also put Greece's credit rating on review for a possible downgrade. Drugmakers also featured among the worst performers, with the STOXX Europe 600 Health Care down 1%. AstraZeneca fell 5% after its new heart medicine Brilinta failed to win approval from US regulators.
On the upside, technology stocks were in demand. SAP gained 1.4% after traders pointed to forecast-beating results of peer Oracle and Qatar's finance minister said the emirate did not rule out investing in the German software giant.
Autonomy jumped 4.3%, also boosted by Oracle's results.
Nokia gained 1% after the quarterly profit of its smaller rival, No. 4 cellphone maker Research In Motion, beat analyst expectations.
"RIM's fiscal 3Q11 shipments confirm expectations of robust smartphone demand at the end of 2010, particularly as it doesn't include the high volume final weeks in December," CCS Insight analyst Geoff Blaber said.
Across Europe, the FTSE 100 index was 0.3% higher, Germany's DAX gained 0.1% and France's CAC 40 was 0.4% higher.
The Peripheral Eurozone Countries Index was 0.9% higher.