Stocks: European shares slip from highs
Stocks in Europe lose some gains after German finance minister cautions on eurozone solution. Stocks are up 11.6 percent over the past nine days.
LONDON — European shares were off earlier session highs on Monday after German Finance Minister Wolfgang Schaeuble played down hopes of a definitive solution to the euro zone debt crisis at the coming EU summit.
The market has rallied 11.6 percent over the past nine days on hopes that French and German leaders were coming together to form an action plan to ease the region's debt crisis, which would include recapitalising the banking sector.
News from the Group of 20 ministers over the weekend that a definitive solution would be presented at a summit on Oct. 23 initially boosted stocks, but comments by Schaeuble that governments would not present a final plan pulled European markets back from their highs.
Banking stocks, a barometer of investor sentiment on the debt crisis because of their exposure to sovereign debt, turned negative, with the STOXX Europe 600 Banks index down 0.2 percent, having rallied 10.1 percent in nine days.
"We are off the top already. We have to be wary; it is a rally based on optimism," said Giles Watts, head of equities at City Index.
"There have already been comments from Germany that things are not going to be firmly resolved by next week. If you look how much it has rallied off lows on expectations of a plan, would you take a risk and continue to be long?"
By 1138 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.2 percent at 977.12 points, having hit a 10-week high of 988.99 earlier.
The benchmark index fell back under a support level of a 50 percent Fibonacci Retracement from the sell-off that started in July to its September low at 983.38 points.
The next support level is seen at the 38.2 percent Fibonacci Retracement at 952.61.
Buyers came for BP , up 4.4 percent and one of the best performers on the FTSE 100 index, after the oil giant agreed a settlement on clean-up costs with Anadarko, its partner in the well that caused last year's giant Gulf of Mexico oil spill.
"If Anadarko pays up, you could find that the other two – BP's contractors Transocean , which owned the Deepwater Horizon rig, and Halliburton , which carried out cementing on the well -- could eventually end up paying up as well," said Manoj Ladwa, senior trader at ETX Capital.