LONDON, Feb 10 - European blue chips edged lower at midsession on Tuesday as disappointing results from oil major BP outweighed a record dividend, share buy back and bumper profits from Swiss financial giant UBS . The energy sector was the biggest faller across the market after figures from BP, the region's largest company by market capitalisation, denting already fragile confidence in oil stocks following Royal Dutch/Shell's shock cut in estimated reserves back in January. "Recent bombshells by Shell have pulled the (oil) sector further down and today's results from BP will not help...We feel investors still prefer cyclical recovery stocks and the defensive oil sector will remain out of favour for a little longer," said broker Charles Stanley in a note.
Expectations of an announcement from OPEC's meeting in Algiers, where ministers are widely expected to leave official production curbs unchanged but crack down on leakage above those limits, also added to the tension in the oil sector. Meanwhile a stronger-than-expected scorecard from Philips Electronics pushed the Dutch stock higher. By 1158 GMT, the FTSE Eurotop 300 index <.FTEU3> was off 0.31 percent at 991.77 points, bobbing just beneath January's 17-month high. The DJ Euro Stoxx 50 index <.STOXX50E> fell 0.2 percent to 2,865 points. U.S. stock futures indicated Wall Street will open little changed. There is no major economic data scheduled for release this afternoon. The week's main economic event will be a two-day testimony on U.S. monetary policy from Federal Reserve Chairman Alan Greenspan on Wednesday and Thursday as investors hunt clues for the timing of any interest rate hike.
UBS, PHILIPS ADVANCE
UBS rose 1.4 percent after the bank posted its best quarterly profit in over three years and said it will pay a record dividend as improved markets and tight cost control helped it beat even the most optimistic market expectations. The world's largest asset manager said it would hand back up to six billion Swiss francs ($4.9 billion) to shareholders via share buybacks and would step up the pace of acquisitions in its core business of managing money for the rich. UBS's cross-town rival CS Group , which reports later this week, rose 0.7 percent. Philips Electronics jumped 2.8 percent after Europe's biggest producer of consumer electronics returned to the black in 2003, with net profit well up on forecasts and as it expressed cautious optimism for 2004. Among the day's other standouts, French automaker Renault posted a 27 precent jump in full-year net profit, and a smaller than expected fall in operating profit. Renault shares gained 1.5 percent. In the banking sector, Germany's second-largest bank HVB Group is considering raising about two billion euros ($2.55 billion) ahead of plans for merger talks with rival Commerzbank , the Financial Times reported. The FT, citing an HVB executive, said the bank was preparing a hybrid debt issue worth up to 500 million euros. An HVB spokesman declined to comment as HVB shares sank 2.5 percent.//