European shares steady near three month high

Air France down 6% but too soon to judge knock-on effect of attacks

Financial traders work at their desks underneath a display of the DAX Index curve at the Frankfurt Stock Exchange in Germany

Financial traders work at their desks underneath a display of the DAX Index curve at the Frankfurt Stock Exchange in Germany

 

European shares steadied near three month highs on Friday, with a benchmark index set for its best week in a month, though the rally was held in check by sales of large stakes in some leading firms.

The FTSEurofirst 300 was down 0.1 per cent to 1,499.92 points, having touched its highest since August on Thursday. It is up three per cent so far this week, putting it on track for its best week since October.

Tourism stocks have lagged the market, hit by security concerns thrown into sharp focus by last Friday’s attacks in Paris.

Air France, down over six per cent in the last two weeks, has experienced some reduction in traffic, but it is too early to say how severe the knock-on impact of the attacks on bookings will be, a company source said.

Defence stocks, meanwhile, have outpaced the market. BAE Systems was up as much as 1.9 per cent in early deals, and has rallied 11.3 per cent in little over a week.

It benefited from an upgrade to “buy” from “sell” from Investec, who cited “deteriorating geopolitical conditions” as limiting the risk to defence budgets in BAE’s core markets.

The STOXX Europe 600 was down 0.1 per cent, while the Euro STOXX 50 drifted 0.4 per cent lower.

The top riser was industrial firm Oerlikon, up seven per cent after Sweden’s Atlas Copco said it would buy the Swiss company’s vacuum business for an enterprise value of €486 million ($520 million) in cash.

The disposal would increase Oerlikon’s margin profile and earnings quality “but also [shift] the current market’s focus away from the fears of the economic slowdown [especially in China],” Baader-Helevea equity analysts said in a note.

Galp Energia dropped 4.8 per cent after Eni sold its remaining four per cent stake in the Portuguese firm, raising 325 million euros, the Italian oil and gas group said.

Abertis also dropped after a stake sale, with CVC placing the remainder of its 6.4 per cent holding. It fell 4.6 per cent, trading just above the strike price and set for its worst day since July 2012.