* FTSEurofirst 300 down 0.4 pct
* Commerzbank falls 4.8 pct as discounted rights issue looms
* StanChart sheds 4 pct as Carson Block bets against group
* STOXX 600 Europe at highest earnings multiple since Jan
By Francesco Canepa
LONDON, May 13 European shares fell from
five-year highs on Monday, hit by weakness in leading banks as
some investors worried that recent market gains were
outstripping firms' earnings expectations.
Germany's No.2 bank Commerzbank fell 4.8 percent
as sources said it may offer shares at a step discount in a
rights issue this week, signalling limited appetite for the
stock and weighing on the European banking sector.
Asia-focused Standard Chartered added to the
sector's gloom, falling 4 percent in volume of 133 percent of
its 90-day average. Traders cited a Bloomberg report that Carson
Block, who runs short-seller research firm Muddy Waters, is
betting against the UK-listed firm's debt because of
deteriorating loan quality.
They were the top fallers on the pan-European FTSEurofirst
300, down 0.4 percent at 1,228.57 points at 1030 GMT,
after closing at a five-year high on Friday. Banks shed 1.7
The STOXX 600 Europe, which fell 0.4 percent,
trades at 12.58 times its forecast earnings for the next 12
months, its highest valuation multiple since early 2010, as a
rise in price has not been matched by expectations of higher
profits, Datastream data showed.
The European earnings season has so far been disappointing,
with 53 percent of companies that have reported missing analyst
expectations, Thomson Reuters Starmine data showed.
"In the last couple of months we have increased our equity
exposure quite significantly, but we'd be a little bit more
cautious at today's level," said Edi Truell, chairman of London
Pensions Fund Authority, which has 4.7 billion pounds ($7.22
"I could easily see a 10 to 15 percent decline in the
market. It has gone a long way (but) it has been buoyed up by
flows of money rather than fundamentals."
But Fidelity's head of pan-European Equities, Paras Anand,
said European stocks still offered good value on a multi-year
view as support measures taken by global central banks showed
policymakers' commitment to tackling the global economic crises.
He cited oversubscribed auctions of riskier sovereign bonds
as evidence investors' appetite for risk was on the rise.
"Take all of those things together and it could suggest that
rather than this being the end of this (bullish market), it's
just the beginning," Anand said.