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Basic Materials
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Market Cap £25.65bn
Enterprise Value £31.23bn
Revenue £38.68bn
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European shares fall as rate-sensitive utilities tumble, warning hits autos

Tue 27th June, 2017 5:52pm
* Pan-European index down 0.8 pct 
    * Hawkish Draghi hammers utilities, lifts banks 
    * Italy's Carige bucks positive banks on capital worries 
    * Schaeffler drags autos after profit warning 
    * Cyber attack hits Maersk, WPP; shares down 
 
 (Writes through, adds details, closing prices) 
    By Danilo Masoni and Kit Rees 
    MILAN/LONDON June 27 (Reuters) - Hawkish comments from 
European Central Bank President Mario Draghi hit interest 
rate-sensitive utilities shares on Tuesday, dragging down 
European indexes, while a warning from auto parts supplier 
Schaeffler hit the whole sector.  
    Draghi on Tuesday opened the door to tweaks in the bank's 
aggressive stimulus policy, fuelling market expectations the 
bank will announce a reduction of stimulus as soon as September. 
 urn:newsml:reuters.com:*:nL8N1JO1H3 
    Utilities  .SX6P , whose constant dividends flows become 
less attractive when monetary policy tightens, fell 2.4 percent, 
suffering their biggest one day loss since November.  
    Shares in Spanish power network operator Red Electrica  
 REE.MC , Italian gas firm Italgas  IG.MI  and German 
heavyweight utility E.ON  EONGn.DE  were among the top losers in 
Europe with losses of more than 3 percent.  
    Their losses helped drag the pan-European STOXX 600  .STOXX  
index down 0.8 percent. 
    However shares in banks, which have long suffered from the 
ECB's ultra loose policy, were boosted by Draghi's remarks with 
the euro zone sectoral index  .SX7E  ending up 1.4 percent. 
    "Today Draghi moved his first step towards indicating that 
ECB monetary policy will become less accommodative in 2018," 
said UniCredit chief euro zone economist Marco Valli.  
    "Unless an unexpected shock materialises, a formal tapering 
announcement is likely to come at the ECB monetary policy 
meeting scheduled on 7 September," he added. 
    Shares in banks such as Caixa  CABK.MC , Deutsche Bank 
 DBKGn.DE , Sabadell  SABE.MC  and Bankia  BKIA.MC  - which are 
more sensitive than others  to the rate cycle - were among the 
top five euro zone bank gainers, all up over 2.4 percent.  
    Bankia got an extra boost as investors cheered to its deal 
to buy smaller peer BMN in a $924 million deal. 
    A weak spot among banks was Italy's Carige  CRGI.MI  which 
fell 3.4 percent to a fresh record low on mounting talk the 
troubled Genoa-based lender will need more capital than the 450 
million euro initially planned to repair its finances.   
    Autos  .SXAP  fell 1.5 percent after German auto parts 
supplier Schaeffler  SHA_p.DE  slashed its profit guidance on 
growing price pressures and high costs. Schaeffler shares 
tumbled 12.8 percent. urn:newsml:reuters.com:*:nL8N1JO0FR 
    "Schaeffler flagging increased pricing pressure will almost 
definitely raise concerns across the supplier space," Jefferies 
said in a note. "Schaeffler's profit warning will reignite the 
debate on the resilience on supplier margins and organic growth 
(post pricing) as we approach the 'peak' of the cycle." 
    German drugmaker Stada  STAGn.DE  dropped 3 percent after 
Bain Capital and Cinven failed to win the required shareholder 
acceptances to take over the firm. 
    Stada, which have rallied nearly 26 percent this year, 
however came off earlier lows after Reuters reported that the 
private equity groups were discussing a new offer.  urn:newsml:reuters.com:*:nL8N1JN4EG  
    A.P. Moller-Maersk  MAERSKb.CO  the world's biggest 
advertising agency WPP  WPP.L  fell 0.5 and 0.8 percent 
respectively after falling victim of a global cyber attack. 
 urn:newsml:reuters.com:*:nL1N1JO0XF  
    Gains among mining firms Anglo American  AAL.L , 
ArcelorMittal  MT.AS  and Rio Tinto  RIO.L  helped prop up the 
basic resources sector  .SXPP . 
 
 (Editing by Jeremy Gaunt) 
 ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging: 
danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni)) 
 
Keywords: EUROPE STOCKS/
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