Telecoms merger news props up European shares, halting market slide
* Vodafone tables 7.7 bln euro bid for Kabel Deutschland * FTSEurofirst 300 flat at 1,131.21 * U.S. stimulus, China banking worries weigh on sentiment * ENRC falls as Kazakhmys backs 3 billion pound bid By David Brett LONDON, June 24 (Reuters) - Merger activity in the telecoms sector halted a slide in European shares early on Monday, cushioning the market against concerns over the withdrawal of U.S. monetary stimulus and the risk of a credit crunch in China. Heavyweight Vodafone struck its biggest deal since 2007, agreeing to buy Germany's largest cable operator Kabel Deutschland for 7.7 billion euros. . Kabel Deutschland's shares rose 1.8 percent and Vodafone was 1.0 percent higher. Debt-laden Spanish major Telefonica rose 0.3 percent after agreeing to sell its O2 Ireland mobile business for 780 million euros. By 0839 GMT, the European telecoms sector was up 0.4 percent and the FTSEurofirst 300 <.FTEU3 flat at 1,131.88. The index has spiralled down from the year's May 23 high of 1,258.09. "The widespread complacency about the adjustment to the tapering environment, which suggested that equities would remain immune to the winding down of central bank support, must now have been dispelled," Ian Williams, equity strategist at Peel Hunt, said. "The transition towards a more growth-driven phase of market performance is likely to remain bumpy through the summer as the long-awaited improvement in corporate earnings has been slow to emerge. Weak sentiment towards miners deepened on worries over China's banking system, where overnight rates remained high. The central bank in Beijing, which withheld funds to the money market last week, said on Monday there was sufficient liquidity and banks needed to improve their cash management. That has highlighted concerns over slowing growth, and Goldman Sachs cut its China GDP forecasts for 2013 and 2014. Goldman Sachs said: "The recent tightening of the interbank market has sent a strong policy signal that the strong credit growth earlier in the year will likely not continue." Miners, which rely heavily on strong demand from the world's biggest consumer of raw materials, were the top falling sector, down 0.8 percent. ENRC fell 3 percent as major shareholder Kazakhmys ratified a bid of around 3 billion pounds by a trio of ENRC's founders, which was unchanged in structure from a proposal first tabled in May. Kazakhmys shed 8.4 percent.
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