* FTSEurofirst down 0.6 percent
* Safe haven assets outperform ahead of US election
* Miners fall in tandem with copper after China data
* Banks knocked as HSBC takes Q3 profit hit
* Ryaniar boost by raised guidance
By David Brett
LONDON, Nov 5 European shares dipped lower by
midday on Monday as investors took shelter in safer havens ahead
of the U.S. election and banks fell after HSBC announced a hit
to third-quarter profits.
By 1200 GMT, the FTSEurofirst had fallen 6.75
points, or 0.6 percent to 1,108.44, having risen 1.6 percent
last week to near early September highs of 1,020 fueled by
better economic data in Asia and the U.S.
This week will be dominated by political and economic
developments which will increase investor uncertainty, with the
once-a-decade power transfer in China and Greece's attempt to
gain political support for measures to obtain further aid in
But the main event will be the U.S. presidential election on
"Equities will remain range bound until after the
elections," Jawaid Asfar, trader at Securequity, said.
"An Obama victory looks priced in but a Romney victory may
cause shares to rally further as his pledge to keep taxes low
would help the well-off and business alike," Asfar said, adding
pharmaceuticals may perform better on an Obama victory and
financials on a Romney win.
Evidence that investors were being cautious was seen in the
near two-month high for the dollar index, while volumes
were a paltry 20 percent of their 90-day average on the
"We continue to see investors sit on their hands," James
Humphreys, senior investment manager at Duncan Lawrie Private
"Those who are making investment decisions risk missing out
if they're sitting in cash and fixed interest rather than being
prepared to buy equities even though the valuations are quite
reasonable," he said.
Against the murky economic and political backdrop, however,
investors continue a flight towards quality assets and desert
miners and banks -- assets which tend to
underperform in an uncertain economic environment.
Miners weakened in tandem with copper prices after downbeat
China service sector data took the gloss off the previous week's
encouraging PMI figures.
Banks shed 1.1 percent with heavyweight lender HSBC
proving a major drag on the sector, down 1.2 percent after its
third-quarter profit was dented by U.S. fines for anti-money
laundering rule breaches, which could cost the company more than
Some 48 percent of European companies have missed profit
expectations so far in the third-quarter, lagging a far better
performance from U.S. peers, according to Thomson Reuters data.
With sentiment depressed ahead of the U.S. elections and
against the uncertain earnings backdrop, perceived quality names
in healthcare and food and beverages
The index's best gainers were those companies that offered
some light for investors at the end of a gloomy earnings tunnel.
A 10 percent jump in first-half profit and raised guidance
propelled Irish low cost airline Ryanair 6.6 percent
higher, helping lift peer Easyjet and the broader travel
and leisure sector.
Weir climbed 5.7 percent after the firm assuaged
concerns over the outlook for engineers by saying it was on
track to meet expectations for the full year.
Despite nearly half the companies that have so far reported
in Q3 missing expectations, analysts have increased
fourth-quarter estimates by around 1 percent for those
corporates, according to Thomson Reuters Starmine data.
On the downside mail delivery firm Post NL fell
9.4 percent after saying it expects mail volume to decline by to
That knocked peer TNT Express which shed 3.4
percent. TNT recently announced a 12 percent fall in quarterly