European shares fall at open as rate-cut effect fades

MILAN: European shares edged lower at the open on Monday, with China's rate-cut effect fading slightly in Europe after markets rallied to two-month highs last week on signs of more central bank support.

The pan-European FTSEurofirst 300 index was down 0.6 percent, while the euro zone's blue-chip Euro STOXX 50 index fell by 0.5 percent.

Technology group Philips fell 2 percent, in spite of better than expected results, after saying the sale of its $3.3 billion Lumileds division was in doubt due to unexpected opposition from the US government.

Carmaker Peugeot fell 2 percent despite posting a 3.2 percent increase in quarterly revenue helped by recovering European demand.

While one trader said he expected profit taking this week, investors will be watching Germany's Ifo business climate sentiment for October, due at 0900 GMT, with any further deterioration seen adding reasons for the ECB to act.