European stocks fell, led by the oil company Royal Dutch/Shell Group, after UBS AG advised investors to trim their holdings of the company. France Telecom SA, the former French phone monopoly, dropped after announcing plans to raise as much as 1.79 billion euros ($2.2 billion) by selling a stake in its yellow pages unit. The Dow Jones Stoxx 50 Index shed 0.7 percent to 2724.97 as of 8:30 a.m. in London. The Stoxx 600 slipped 0.5 percent and the Euro Stoxx 50, a measure for the 12 countries sharing the euro, also lost 0.5 percent. The benchmarks fell for the second day.
Royal Dutch/Shell was cut to ``neutral'' from ``buy'' at UBS. Royal Dutch Petroleum Co., which owns 60 percent of the company, declined 1.4 percent to 42.87 euros. Shell Transport & Trading Co., the owner of the rest, fell 1 percent to 407.5 pence. France Telecom, Europe's second-largest phone company, declined 0.4 percent to 20.39 euros. The company plans to sell shares of Pages Jaunes in an initial public offering at 13.2 euros to 15.2 euros, giving the directories unit a market value of as much as 4.16 billion euros, the company said. Bouygues SA, which controls France's third-largest wireless phone company, rose 0.4 percent to 28.36 euros. The company will cut the price of text messages sent from mobile phones from Aug. 25, Chief Executive Officer Gilles Pelisson said in an interview with Le Parisien.
Deutsche Post
Deutsche Post AG, Europe's biggest postal service, fell 0.2 percent to 17.24 euros. Its sale of shares in its Postbank unit will likely be oversubscribed, Handelsblatt said, citing unidentified bankers and fund managers. The number of Deutsche Postbank shares ordered may be as much as twice the number of shares available, the paper said. Swiss International Air Lines Ltd., the unprofitable national carrier, shed 4.4 percent to 10.75 Swiss francs after saying it could post an operating loss this year following a ``steep'' rise in fuel prices. Fuel prices could increase its costs by 85 million Swiss francs ($68 million), the company said yesterday after the close of European markets. Shares and bonds of Alitalia SpA, Italy's flagship airline, are suspended from trading pending a statement from the company, the Italian Exchange said. ///