European shares steady, weaker commodity stocks offset pharma rally

LONDON: European shares held steady at the start of the month on Monday, with a rally in some drug stocks on the back of positive company updates offset by lingering concerns over Greece's debt situation and weaker commodity stocks.

Drugmakers Roche and AstraZeneca, up 2.2 percent and 1 percent respectively, supported the healthcare sector after each published a positive update on one of their anti-cancer drugs.

But Greece missed a self-imposed Sunday deadline for reaching an agreement with its international lenders for a cash-for-reforms deal, giving investors reason for caution. Without a deal Athens risks default or bankruptcy in weeks. Greece's ATG share index fell 1.4 percent.

"I cannot see a deal being done this week with both sides apparently still far off on key issues of labour and pension reform and VAT," Oanda analyst Craig Erlam said.

"The most likely outcome this week is likely to be the IMF (International Monetary Fund) rolling together all repayments due to it in June ... This buys the country a few more weeks."

Energy and mining stocks slipped after crude oil prices fell on expectations that OPEC production would remain high, stoking worries of oversupply, and as prices of key metals prices fell as much as 1.4 percent.

The FTSEurofirst 300 index of top European shares was flat in percentage terms at 1,586.57 points by 1110 GMT after shedding 2 percent the previous week. The index is still up about 16 percent so far this year.

Insurers also slipped after the EU's insurance watchdog said the European Central Bank's bond buying programme was putting additional pressure on the bloc's insurance firms and pension funds, already beset by low interest rates.

The STOXX Europe 600 Insurance index fell 0.9 percent.

Among other movers, shares in Vestas Wind fell 4.7 percent, the top fallers on the FTSEurofirst 300, after Citigroup analysts downgraded the stock to "sell" from "hold".

"Vestas' growth profile does not appear as compelling as the cap goods sector," the analysts wrote in a note.