STOCKS NEWS EUROPE-AB Foods weak; Goldman downgrades

Shares in Associated British Foods (ABF.L) fall 1.4 percent in a weak food producing sector after Goldman Sachs cuts its rating to "sell" from "neutral" as it resuffles ratings in a review of European consumer products.

Goldman Sachs says investors are increasingly attempting to look through the economic cycle, encouraged by stabilising economic data and this has led it to reassess the normalised earnings power of consumer staples, raising targets and estimates across the board.

The broker says its belief is that a pronounced consumer recovery is more likely to be led by emerging market consumers as westerners concentrate on de-leveraging and therefore it favours companies with exposure to Brazil, India, China, and Russia (BRIC).

Goldman Sachs says, in addition, it continues to favour restructuring situations, which have the potential to unlock major shareholder value.

In the UK, the broker also downgrades sugar producer Tate & Lyle (TATE.L) to "sell" from "neutral" but upgrades drinks group Diago (DGE.L) to "buy" from "neutral" and ups the Imperial Leather soap firm PZ Cussons (PZC.L) to "neutral" from "sell".

Tate & Lyle shares shed 1.1 percent, PZ Cussons loses 0.8 percent while Diageo gains 0.4 percent.

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net