September 5, 2018 / 7:44 AM / 3 months ago

European shares dip on trade tensions, Italy banks buoyed

LONDON (Reuters) - European shares traded lower on Wednesday as trade tensions and growing worries about emerging market currencies cut investor appetite for risky assets.

The German share price index DAX is seen at the stock exchange in Frankfurt, Germany, August 27, 2018. REUTERS/Staff/Remote

The pan-European STOXX 600 ended down 1.1 percent at a two-month low, with losses spread across sectors and trading centers despite data showing that Euro zone business activity accelerated slightly in August.

A rare glimmer of optimism lifted Italian banks, buoyed by deputy Prime Minister Matteo Salvini saying that Rome would “try to be good” with respect to European Union budget rules.

Rating agency Scope also issued a note saying that while “volatile politics have reignited fears around Italian banks”, there has been progress on non-performing loans.

Shares in UBI Banca (UBI.MI), Banco BPM (BAMI.MI) and Mediobanca (MDBI.MI) rose between 3.3 and 7.2 percent.

Corporate announcements also triggered strong swings.

French pharmaceutical group BioMerieux (BIOX.PA) rose 4.7 percent after better than expected first-half results and a raised 2018 outlook.

In the same sector, Bayer (BAYGn.DE) lost 1.7 percent after reporting a disappointing 3.9 percent gain in underlying core earnings for the quarter.

Tech .SX8P was the biggest sectoral loser, down 3 percent.

Top loser among tech was Temenos (TEMN.S), which fell 11.3 percent after Jefferies started coverage of the banking software maker with an underperform rating, saying margin performance will likely disappoint.

The biggest faller on the STOXX was Denmark’s Ambu (AMBUb.CO) whose shares sank 13 percent after news that a shareholder sold shares in the company.

Among top gainers, outdoor advertising group JCDecaux (JCDX.PA) added 5.6 percent after a rating upgrade by BofA Merrill.

British betting company William Hill (WMH.L) jumped 4.8 percent after it signed a 25-year sports-betting partnership with casino operator Eldorado Resorts (ERI.O), which investors see as a major step in its U.S. expansion.

Reporting by Julien Ponthus and Danilo Masoni; Editing by Toby Chopra

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