European shares end lower after choppy session, lenders slip

European equities ended lower on Thursday, with financial shares losing ground and stocks like Skanska and Daimler slumping after trading without the attraction of their latest dividend payouts. European banks fell 2.2 percent amid talk of more lay-offs and cutbacks planned by Europe's major lenders as they struggle with zero rates. European Central Bank's willingness to ease monetary policy further, according to three top officials including its president, also soured sentiment.
Italian banks Unicredit, BMPS, Banco Popolare and UBI Banca fell 5.9 to 8.1 percent, with the country's benchmark FTSE MIB index hitting a one-month low and closing 2.5 percent lower. "If bank stocks are a leading indicator then broader markets are in for a large pullback," said Jasper Lawler, analyst at CMC Markets. German carmaker Daimler fell 4.8 percent, dragging the sector index down to end 2.5 percent weaker. Among other companies losing the right to the next payout were Skanska, which fell 8.7 percent, making the stock the biggest faller on the FTSEurofirst, and Pearson, which slipped 5 percent.
The pan-European FTSEurofirst 300 ended 0.8 percent lower after hitting a one-month low earlier in the session. The index, down 10 percent so far this year, remained on track for its fourth straight week of losses. "What markets really would need are more positive global economic data ... indicating a pick-up in economic activity, especially in the euro zone and the US," City of London Markets trader Markus Huber said.
Healthcare stocks advanced for a second session, with the sector index rising 0.5 percent after the termination of the Pfizer-Allergan merger deal fuelled talk of other consolidation activity in the sector. Shire rose 0.8 percent after saying it expected its deal to buy American drugmaker Baxalta to proceed as expected, while elsewhere in the sector Roche also gained 0.7 percent and Astrazeneca advanced 1.2 percent.
STMicroelectronics gained 4.3 percent, the top gainer in the STOXX Europe 600 index, with some brokers linking the surge to the strong earnings update from its client Samsung, with the South Korean group flagging a 10 percent jump in quarterly profit. Other chipmakers also gained, with ARM Holdings and ASML Holding rising 1.3 percent and 0.5 percent respectively. Randgold Resources rose 3.2 percent to 6,595 pence, the top gainer in the pan-European FTSEurofirst 300 index, as gold prices jumped on a weaker dollar. The stock was also helped by a move by Credit Suisse to raise its target price for the stock to 6,700 pence from 6,400.