Property groups lead European stocks lower

By Neil Dennis

European equity markets fell on Thursday after rising government bond yields hit US stocks overnight on concerns over rising global interest rates.

By late morning in London, the FTSE Eurofirst 300 was down 0.5 per cent to 1,611.44, led lower by falling real estate stocks and construction and materials groups.

Frankfurt's Xetra Dax fell 0.8 per cent to 8,028.45, while the CAC 40 in Paris lost 0.6 per cent to 6,056.45 and London's FTSE 100 shed 0.4 per cent to 6,622.7.

Sacyr-Vallehermoso, the construction group, fell 4.4 per cent to EU36.88 as investors sold down its exposure to rising interest rates and their impact on the struggling Spanish property market.

French property developer Unibail fell 1.8 per cent to EU193.07, while Austria's Immoeast fell 2.7 per cent to EU9.91 and Britain's Land Securities Group shed 3 per cent to £17.38.

A spate of positive broker notes lifted shares in utility EdF, making it France's largest listed company by market value. Societe Generale lifted its price target from EU66 to EU88 due to the company's improved pricing and increased nuclear reactor life expectancy.

UBS, meanwhile, raised its price target from EU80 to EU100, saying it expected the government to sell a stake in the company by September and announce a phasing out of regulated tariffs. Shares in EdF rose 7.2 per cent to EU79.40.

Luxottica, the Italian maker of designer eyewear, rose 6.6 per cent to EU27.96 after it announced the acquisition of US sunglasses maker Oakley for $2.1bn.

Broker Cheuvreux raised its price target from EU27 to EU29.50, and maintained its "outperform" rating, saying the purchase was "extremely favourable" for Luxottica and would trigger further growth.

Danish drugmaker Novo Nordisk rose 4.1 per cent to DKr588 after publishing positive phase three data for Liraglutide, its diabetes drug. [via]