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UPDATE 1-Swiss banks' weakness pushes down European equities

Sudip Kar-Gupta
Wednesday, 26 Feb 2014 | 4:05 AM ET

* FTSEurofirst down 0.3 pct, ESTOXX50 falls 0.1 pct

* Ct Suisse falls on U.S. Senate probe

* Jeronimo Martins down as brokers cut targets after Q4

* FTSEurofirst still near highest level since May 2008

LONDON, Feb 26 (Reuters) - A fall in the shares of major Swiss banks Credit Suisse and UBS weighed on European equities on Wednesday, stalling the advance of a leading regional index to near 6-year highs.

The pan-European FTSEurofirst 300 index was down by 0.3 percent at 1,347.59 points in early session trading, retreating after a strong run in February which had taken it close to its highest level since May 2008.

The euro zone's blue-chip Euro STOXX 50 index also slipped 0.1 percent to 3,153.89 points.

Credit Suisse fell around 2 percent while rival UBS weakened by 1.2 percent, with both companies taking the most points off the FTSEurofirst 300 index, after fresh signs of pressure on the Swiss banking industry from U.S authorities.

The pan-European STOXX Europe 600 Bank Index also fell 0.4 percent.

A U.S. Senate subcommittee on Tuesday alleged new misdeeds by Credit Suisse and accused the U.S. Justice Department of dragging its feet.

The Justice Department is probing 14 Swiss banks five years after UBS, Switzerland's largest bank, admitted to helping U.S. taxpayers hide money from the tax man, and agreed to provide client information.

"For Credit Suisse, it's just one more problem they have to deal with," said Ion-Marc Valahu, fund manager at Geneva-based firm Clairinvest, whose portfolio is "underweight" on European banks.

JERONIMO MARTINS SLUMPS

Portuguese retailer Jeronimo Martins also slumped 6.4 percent in heavy volume, making it the worst-performing stock on the FTSEurofirst 300 in percentage terms.

Jeronimo Martins posted fourth quarter net profit slightly below the average market forecast late on Tuesday, and a wave of brokers including Barclays and JP Morgan cut their price targets on the stock on Wednesday.

The FTSEurofirst 300 index rose 16 percent in 2013 to record its best annual gain since 2009.

The index has risen around 2 percent since the start of 2014, and has rebounded some 6 percent in February after a fall at the start of the year caused by concerns over a downturn in emerging markets economies.

The earnings season has supported that rebound, with 59 percent of companies on the pan-European STOXX Europe 600 index beating or meeting expectations with their results so far.

Europe bourses in 2014:

Asset performance in 2014:

Today's European research round-up

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