European shares hit a 10-month high last week but fell back on Friday, tracking losses on Wall Street. Talk that LVMH could sell its coveted Moët Hennessy division to long-time suitor Diageo sent the luxury brand group’s shares higher. LVMH has repeatedly denied it is planning to sell, in spite of rumors that Diageo is a willing buyer. It ended the week up 3.2% at €65.62. Nestlé shares fell 4.3% at SFr42.20 after the Swiss food group reported a slide in profits and sales in its interim results. UBS shares rose 4.7% to SFr17.12 over the week following the Swiss bank’s provisional settlement of a long-running tax dispute with the US government. But Credit Suisse gave back gains from earlier in the week to close down 0.1% at SFr53.20, while Germany’s Commerzbank fell 0.3% to €5.95. France’s Natixis had a turbulent week, rising sharply before ending 8% lower at €2.23. Banco Santander, Spain’s largest bank by market value was flat for the week at €10.16. ING, the Dutch banking and insurance group, announced it had returned to profit in Q-2 following three successive periods of losses, though results fell short of analysts’ expectations. Its shares rose 4% to €9.56. Peer Aegon fell 11.8% to €5.20 after launching a €1bn share placing. Germany’s Eon followed the trend of its competitors in posting better-than-expected earnings. The world’s largest utility company reported earnings before tax down 1% in the first six months. Its shares rose 2.9% to €27.55. Results earlier in the week from France’s EDF and Italy’s Enel also beat analysts’ expectations. EDF’s shares gained 1.9 per cent to €34.76 and Enel rose 1.8 per cent to €3.97. The FTSE Eurofirst 300 index fell 1 % over the week to 940.94, but on Thursday hit its highest level since November 5. In Germany the Xetra Dax was dragged down by the heavily weighted Volkswagen’s sharp decline on Friday. The car manufacturer dropped 21.7% to €190.70 as more details of its costly integration with Porsche were released. In sharp contrast, Porsche shares rose 7.9% on Friday to €48.50. The Dax closed 2.7% lower at 5,309.11. Among the individual performers, Swatch Group, the world’s largest watchmaker, climbed 16.2% to SFr237 over the week after reporting that first-half profits had beaten forecasts and that it expected demand to increase in the second half. Anheuser-Busch InBev, maker of Stella Artois and Beck’s beers, announced Q-2 profits that beat forecasts, though analysts stressed they expect a weaker second half of the year. The company’s shares fell 1.8 % to €27.17.
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