Investors dumped broad swathes of European shares on Monday, sending benchmarks down to early January levels amid a dearth of positive news, rekindled security concerns and the prospect of more losses in New York. But Belgian telecoms group Belgacom made a solid debut in Brussels, while Spain's Zeltia was lifted by hopes for a new drug. By 1152 GMT, the FTSE Eurotop 300 index <.FTEU3> was off 1.5 percent at 962 points, its weakest level since January 2. Nearly all the shares in the index fell with volume good.
A thin menu of corporate news, a slide in the dollar, and security concerns in the Middle East and Pakistan compounded the bearish tone that began two weeks ago as investors balked at pushing stocks beyond 20-month highs after a nearly year-long run-up. Corporate news is not expected to pick up until a new U.S. earnings season starts in earnest in mid-April. "There is nothing for the markets to latch onto. It's the path of least resistance," said Anais Faraj, global strategist at Nomura bank. Belgacom made a steady market debut after the shares were priced at a lower-than-expected 24.50 euros per share on Sunday, giving it a market capitalisation of some 8.6 billion euros ($10.6 billion). Shares in Belgacom rose 3.5 percent to 25.36 euros.
WALL STREET WOBBLY
Wall Street sank about one percent on Friday after European bourses shut, setting the stage for Monday's sell-off in Europe. U.S. stock index futures indicated that follow-through selling in New York was likely. "It's a combination of things. People woke up rather disappointed that Wall Street was weaker on Friday and there are also general concerns about where does the next stimulus for the equity market come from," said Nigel Cobby, managing director of European equities at J.P. Morgan investment bank. On Monday there were also fresh security concerns after Israel killed Skeikh Ahmed Yassin, spiritual leader of the Hamas militant group, adding to tensions in the Middle East. Pakistan troops remained locked in battle with a group of suspected al Qaeda fighters, and the stock market in Taiwan fell by nearly seven percent after a disputed presidential election victory. "Generally the background news is not good. Iraq is still a big problem and you have the assassination of the Hamas spiritual leader. These are all reasons why people are not so much selling but staying on the sidelines," Cobby said. The DJ Euro Stoxx 50 index <.STOXX50E> shed 1.8 percent to 2,719 points.
ERICSSON TUMBLES, AVENTIS BUOYED
Swedish telecoms equipment maker Ericsson slid 4.8 percent after announcing it would stop rival Nokia from gaining control of mobile phone software maker Symbian by raising its own stake in the company. On a brighter note, Spanish pharmaceutical company Zeltia rallied 2.2 percent after saying it had started a phase one clinical trial with Aplidin on leukaemia and solid tumours in children. Elsewhere in pharmaceuticals, French drug firm Aventis was buoyed by fresh merger speculation. Swiss drugmaker Novartis's plan to buy Aventis would entail the creation of two new groups -- one comprised of growth drug areas like oncology and the other for older drugs, which would be spun-off, French newspaper Le Figaro said on Monday. Novartis has said it is considering a bid for Aventis, which is trying to fight off a hostile 46.3 billion-euro ($57.11 billion) offer from French rival Sanofi-Synthelabo . Aventis shares rose 1.6 percent, while Novartis dropped 1.5 percent, and Sanofi shed one percent.///