KPN and Aggreko Slumps Hit European Stock Markets
European shares fell on Monday, hit by slumps in Dutch telecoms group KPN and temporary power company Aggreko as investors cashed in some equity holdings at the start of the final, full trading week of 2012.
A 14.9 percent slump by KPN shares - after the Dutch firm cut its dividend citing high Dutch spectrum auction costs - hit European markets, dragging British peer Vodafone down 1.96 percent, a fall which took the most points off the FTSEurofirst 300. Telecom stocks were the big fallers on Monday.
Meanwhile British temporary power provider Aggreko dropped 21.6 percent after issuing its second profit warning in two months.
The FTSE and the French CAC closed provisionally down 0.3 percent, while Germany's DAX closed flat. In the morning, the DAX hit its highest level since January 2008, when it touched 7624 points, before turning lower. Italian stocks provisionally closed 0.5 percent higher as investors bought beaten-down bank stocks.
European shares fell in spite of early gains by U.S. stock markets which reacted positively to some signs of progress over a deal to avoid the "U.S. fiscal cliff" - some $600 billion of tax hikes and spending cuts, due in January which could push the U.S. economy into recession.
Darren Easton, director of trading at Logic Investments, said he had bought some Vodafone stock following their decline, but would generally look to sell shares before the year-end due to uncertainty over the U.S. "fiscal cliff" talks.
"I've been selling since the last three or four days, believing that we won't be able to stay at these highs without some deal being done on the 'fiscal cliff'," said Easton. "The closer we get to the end of the week, the more nervous people will get and the more likely they will be to sell the market," he added.
In Europe, investors eyed European Central Bank President Mario Draghi in the afternoon as he testified before the European Parliament's economic and monetary affairs committee.