European shares were lower around midday on Tuesday in choppy trade with falls in banking and energy stocks overshadowing gains in drugmakers.
By 1045 GMT, the pan-European FTSEurofirst 300 index was down 0.1 percent at 910.72 points, having been up as much as 918.45 points earlier.
The index on Monday hit its highest close since Nov. 10 and has gained about 41 percent since reaching a lifetime low of 645.50 points in early March.
"We are seeing a bit of profit taking, which is not too surprising after the run we have had in the past two-weeks," said Philippe Gijsels, strategist at Fortis Bank.
"Going forward I think people should remain cautious … as everything we have seen in the past two weeks have been based on hopes of a recovery in the second half and that earnings will grow … but I think the market maybe disappointed," he said.
Banks took the most points off the index. Deutsche Bank was down 8.4 percent after it raised its loan loss provisions in the second quarter, overshadowing a nearly 70 percent rise in net profit driven by its investment bank.
BNP Paribas, UniCredit and UBS were down 0.7-2.4 percent.
Energy stocks were in the doldrums. Oil giant BP fell 1.5 percent after it said it had increased its cost reduction targets for 2009 by 50 percent to $3 billion, as it reported a halving in second quarter profits due to lower oil prices and weaker refining margins. Premier Oil, Dana Petroleum and Total were down 0.6 to 1.2 percent.
Miners were lower, with Xstrata down 4.4 percent despite posting solid first-half production numbers.
Charles Kernot at Evolution Securities who said the production figures were positive, still reiterated a "reduce" rating after the shares surged 35 percent during the two weeks up to Monday.
Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation and Rio Tinto were down 0.9 to 3 percent.
AHOLD FALLS, LAGARDERE CLEARED
Dutch supermarket group Ahold slipped 4.1 percent after it said it had missed forecasts as the economic slump drove shoppers to cut their spending on food. "There is this sentiment in the market about the glass being half full — but there is a big gap between the euphoria and reality, a bit like a supermodel without makeup," said Commerzbank Chief Strategist Hans-Juergen Delp.
"Earnings expectations have been lowered so much that they are easily exceeded," he added.
In individual stock movers, Lagardere soared 11 percent after it said it has been cleared in the EADS insider trading investigation.
Drugmakers were also in demand as investors turned to the safety of defensive stocks.
Sanofi-Aventis was 2.5 percent higher after Morgan Stanley upgraded the stock to "overweight" from "equal weight."
Across Europe, the FTSE 100 index was down 0.4 percent, Germany's DAX was 0.1 percent lower and France's CAC 40 was down 0.1 percent.
