European Shares Decline As Investors Look to Fed This Week for Clues on Tapering


European stocks dropped as all eyes are on the latest Federal Reserve minute meeting this week.

Investors will look for clues in the minutes for when the Fed may start to taper its bond-buying program.

Around the region, the average asking price for a home in the U.K. fell for the first time this year amid the traditional summer slowdown, but transactions remained higher than a year ago, and the shrinking supply needs to be addressed by the government in order to avoid a house price bubble, a survey showed. Online estate agency Rightmove said the average price for a home on its website fell 1.8% in the early weeks of August compared with the same period in July. Compared with a year ago, however, prices were up 5.5%, reflecting the strength of price increases in the previous seven months of the year. In July house prices rose 0.3% on the month and were 4.8% higher on the year.

UK banks were pressured after Standard & Poor's Ratings Services said revenue growth for the sector is likely to "remain subdued despite signs of economic growth in the U.K."

Germany's Bundesbank said higher interest rates would become necessary if inflation increases.

Italian shares sank after local newspapers over the weekend said center-right leader Silvio Berlusconi threatened to bring down the government if he is expelled from the Senate, Reuters reported.

In ADR news, Shire PLC ( SHPG ) has hired Lazard to beef up its team of advisers amid fears of a 17 billion pound takeover attempt by a big U.S. rival, the Sunday Times reported, without naming sources. It is thought the appointment was prompted by an informal approach earlier this year from Bristol-Myers Squibb Co. ( BMY ), which was rebuffed, said the Sunday Times. Existing advisers include Morgan Stanley and Deutsche Bank, it said.

Statoil ASA ( STO ) has agreed to sell to OMV AG its stakes in oil and gas fields in Norway and the U.K. for $2.65 billion. The purchase price is subject to customary adjustments for the year 2013, and is expected to increase by around $500 million. OMV has agreed to buy 19% in the producing oil and gas field Gullfaks and 24% in the oil and gas development project Gudrun on the Norwegian Continental Shelf. In addition, it has agreed to acquire 30% in the oil field development Rosebank and around 5.88% in the oil field redevelopment project Schiehallion in the U.K. OMV and STO have also agreed on an optional participation in 11 of STO's exploration licenses in the Faroe Islands and the Norwegian North Sea. The companies have entered into a strategic research and development partnership on enhanced oil recovery. The deal is seen closing around year-end.

The FTSE-100 was last down 0.53% at 6,465.73, the DAX down 0.31% at 8,366.29 and the CAC-40 down 0.97% at 4,083.98.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: BMY , SHPG , STO

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