Europe: Shares dip on trade tensions, Italy banks buoyed

[LONDON] European shares traded lower on Wednesday as trade tensions and growing worries about emerging market currencies cut investor appetite for risky assets.

The pan-European Stoxx 600 ended down 1.1 per cent at a two-month low, with losses spread across sectors and trading centres despite data showing that Euro zone business activity accelerated slightly in August.

A rare glimmer of optimism lifted Italian banks, buoyed by deputy Prime Minister Matteo Salvini saying that Rome would "try to be good" with respect to European Union budget rules.

Rating agency Scope also issued a note saying that while "volatile politics have reignited fears around Italian banks", there has been progress on non-performing loans.

Shares in UBI Banca, Banco BPM and Mediobanca rose between 3.3 and 7.2 per cent.

Corporate announcements also triggered strong swings.

French pharmaceutical group BioMerieux rose 4.7 per cent after better than expected first-half results and a raised 2018 outlook.

In the same sector, Bayer lost 1.7 per cent after reporting a disappointing 3.9 per cent gain in underlying core earnings for the quarter.

Tech was the biggest sectoral loser, down 3 per cent.

Top loser among tech was Temenos, which fell 11.3 per cent after Jefferies started coverage of the banking software maker with an underperform rating, saying margin performance will likely disappoint.

The biggest faller on the Stoxx was Denmark's Ambu whose shares sank 13 per cent after news that a shareholder sold shares in the company.

Among top gainers, outdoor advertising group JCDecaux added 5.6 per cent after a rating upgrade by BofA Merrill.

British betting company William Hill jumped 4.8 per cent after it signed a 25-year sports-betting partnership with casino operator Eldorado Resorts, which investors see as a major step in its US expansion.

REUTERS