European share prices were still weak by midday on Monday after hitting an 11-week low, with persistent concerns about the strength of an economic recovery and company earnings in the second quarter hitting banking and mining stocks.
The FTSEurofirst 300 index of top European shares was down 0.3 percent at 812.18 points by 1031 GMT after touching 805.93, the lowest since late April. The index, which has fallen in seven of the past eight sessions, slipped 1.1 percent on Friday, notching up a fourth straight week of losses.
Banks featured among top losers on the index. HSBC, Barclays , Lloyds, Societe Generale Standard Chartered and BNP Paribas fell 0.3-2.1 percent.
But UBS rose 1 percent. The U.S. government and the Swiss bank asked a judge on Sunday to delay the start of a trial, as they seek to resolve their dispute over U.S. demands for the identities of thousands of wealthy Americans suspected of using the bank to dodge taxes.
Analysts said uncertainties about earnings continued. U.S. oil major Chevron last week gave a downbeat earnings outlook.
"We do not expect the Q2 reporting season will trigger a material change in the earnings revision trend," said Gerhard Schwarz, head of global equity strategy at UniCredit.
"The estimates for 2009 are probably still slightly too high and will, therefore, likely continue to decline, but the estimates for 2010 should remain relatively stable given the intact prospect of an economic recovery next year."
Investors await U.S. earnings results this week from Goldman Sachs, Intel, JP Morgan Chase, Bank of America, Citi, IBM, Google, Intel and General Electric. In Europe reports are due from Nokia, Alstom and Novartis.
Miners also lost ground, tracking weaker metal prices. Anglo American, Antofagasta, Rio Tinto and Xstrata fell 1.2-4.9 percent.
"I don't think we will see an economic recovery this year and … earnings estimates are still too high, so there is room for disappointment," Philippe Gijsels, senior equity strategist at Fortis Bank, in Brussels.
BREWERS SLIP, AUTOS RACE AHEAD
The beverage sector also felt the pinch. AB InBev, the world's largest brewer, SABMiller, the sector's second largest, Heineken and Danish brewer Carlsberg were down 0.1-2.1 percent.
Analysts said the market needed a push to move out of the current trading ranges.
"It feels like the excitement we all felt a month ago at the sustained rally has drained away, leaving a bitter taste in the mouth," said Owen Ireland, an analyst at ODL Securities.
"Should the markets have simply flattened out it would not feel so uncomfortable, as we could quite imagine a mid-July resurgence. Instead, markets have been riddled with weakness, and sentiment will surely have to change dramatically if we are to see things improve."
Automakers, however, were on the positive side. Porsche rose 9 percent after a report said the ruler of the Gulf state of Qatar is willing to offer 7 billion euros for both a stake of just over 25 percent in the listed holding and Porsche's cash-settled options in Volkswagen stock. Daimler and Fiat rose 0.5-2.6 percent.
Dutch conglomerate Philips Electronics rose 4.8 percent after it signalled brighter business prospects for the second half of 2009, helped by cost cuts, as it surprised the market with a return to profit in the second quarter.
Life insurer Friends Provident jumped 7.9 percent after it rejected a takeover proposal from sector buy-out firm Resolution , saying the terms were inadequate.
