Egyptian turmoil drives European shares lower

European shares fell on Friday on concern growth may be crimped, as protests in Egypt escalated and a pick-up in US consumer spending failed to excite markets in the face of a weaker-than-expected overall GDP figure. The pan-European FTSEurofirst 300 index of top shares closed down 1 percent at 1,143.63 points, its lowest close since January 20, after gaining the previous two sessions.
"Consumer spending was good in the GDP data, but unless the overall growth figure is above expectations it is not going to get the market moving," Heino Ruland, strategist at Ruland Research in Frankfurt said. Underpinning the late sell-off was investor caution about access to the Suez Canal, crucial to Europe's imports of oil and Asian goods, as clashes escalated between government forces and protesters demanding the removal of President Hosni Mubarak.
"Egypt is driving investors to get out of riskier assets ahead of the weekend. There is ongoing unrest and investors think it is wiser to get out now," a London-based trader said. Miners were on the decline as investors stuck to a cautious view on the global economy. Vedanta, Anglo American and Kazakhmys fell 2.3 percent to 4.5 percent. Crude jumped 4.3 percent on the Egypt worries, but oil stocks fell as concerns weighed about what the unrest could mean for future growth prospects. BG Group, Cairn Energy and Petrofac lost between 3.2 and 4.2 percent.
Elsewhere on the downside, French drugmaker Sanofi-Aventis fell 3.8 percent after BSI-201, an experimental drug to treat a type of advanced breast cancer in its research pipeline failed in late-stage clinical trials. TUI Travel lost 4.5 percent after French broker Natixis downgraded its rating for European's biggest travel company to "neutral" from "buy". Spain's Criteria jumped 16.9 percent on news of La Caixa's plans to transfer its banking business - which accounts for about 8 percent of Spain's banking system - to the publicly listed holding company.
Spanish property companies also surged after the news. Reyal Urbis, Metrovacesa, Colonial and Quabit were up 2.1 to 9.8 percent. Across Europe, the FTSE 100 index was down 1.4 percent, Germany's DAX was 0.7 percent lower and France's CAC 40 was 1.4 percent.