European shares edged lower on Monday, consolidating gains from a strong week which saw a top index touch a 3-month high, with a drop in French utility EDF weighing on the market.
The pan-European FTSEurofirst 300 index was down 0.7 per cent at 1,362.58 points, and was 1.6 per cent off from last Thursday’s peak, which was its highest level since January.
The index ended up 1.6 per cent for the week, a second straight weekly gain, and followed Asian shares in seeing profit taking after a strong run.
Germany’s DAX was down 1.1 per cent, the region’s underperformer, after German business morale fell in April.
The German Ifo Business climate index came in at 106.6 in April, missing a consensus forecast of 107.
Top faller on the FTSEurofirst 300 was EDF, which slumped 6 per cent to €11.50 on a capital raising plan.
The French utility has delayed a decision on its Hinkley Point nuclear project, but in the meantime secured a state-backed financing package, which put pressure on the shares.
“We assume the capital increase will take place at a circa 15 per cent discount to the share price,” said Exane BNP Paribas in a note, cutting its target price to €10 and reiterating an “underperform” rating on the stock.
“Our EPS estimates are lowered to reflect the dilution from the capital increase.”
Philips also fell, and was down 3.9 per cent after its results. While results beat expectations, it said it was likely to float its lighting division in an initial public offering.
That disappointed some investors who had been hoping that the Dutch medical equipment and services company might be able to sell the unit.
Other top fallers were mining stocks, and the STOXX Europe 600 Basic Resources index was the top sectoral faller, down 2.6 per cent, falling with the price of copper.
Oil and gas shares also dropped, down 1.3 per cent, as crude prices pulled back after a strong three week run.