CNN: Europe weighed down by Iran, banks

LONDON, England (Reuters) -- European shares were steady on Monday, pausing for breath after last week's rally, as political tension over Iran and downbeat bank and utility shares offset oil stocks, which benefited from high crude prices.
The FTSEurofirst 300 index of top European shares was flat at 1,524.03 points, after rising every day last week, as merger and acquisition activity in two continuing sagas captured investor interest.
Shares in Spanish builder Acciona rose 2.6 percent after it and Italian utility Enel said they would bid at least 41 euros a share for Spain's Endesa, trumping a raised bid from Germany's E.ON.
Endesa was up 4 percent, Enel up 0.6 percent and E.ON down 1 percent.
"The struggle is going on," said Achim Matzke, head of global equity technical and index research at Commerzbank who said M&A was a key factor this session.
"We had a good week last week ... so it is not surprising that we get a typical, normal consolidation day after the rally we saw last week."
The main loser in the index was Volkswagen, down 4 percent after Porsche said it planned to offer the legal minimum to VW shareholders in a takeover offer after raising its voting stake in Volkswagen.
Around Europe, Germany's DAX was down 0.2 percent, France's CAC 40 was 0.3 percent lower while Britain's FTSE gained 0.1 percent.
Last week's rally means that the FTSEurofirst 300 is up nearly 7 percent from its lowest point during a global stock sell-off in March.

Iran's impact

Iran said on Sunday it would limit cooperation with the U.N.'s nuclear watchdog and resolved not to halt its atomic work after the Security Council voted to impose new sanctions. Oil rose on Friday after Iran seized 15 British naval personnel in the Gulf.
"The capture of UK naval personnel may be more worrying than it first appears, as it implies Iran will neither back down in the face of U.S. intimidation nor UN resolutions -- the market should be prepared for the risk of conflict," said Dutch bank ING in a note.
Iran is the world's fourth-largest oil exporter, and the tension in the region helped to push oil towards $63 a barrel, setting a fresh 2007 record.
The DJ Stoxx European oil & gas index rose 1.1 percent with Total and BP gained 1 percent, while Royal Dutch Shell rose 1.4 percent.
But banks were losers, with Royal Bank of Scotland down 1.7 percent after a Daily Telegraph report over the weekend said the bank was being pressed by shareholders to examine a bid for Dutch rival ABN AMRO.
ABN is currently in exclusive merger talks with Barclays, whose shares were down 2 percent after a downgrade from Dresdner.
Traders also cited fears that a tie-up between Barclays and ABN AMRO would represent poor value for shareholders.
Indeed, hedge fund TCI said it may take legal action against ABN AMRO if it does not consider any other takeover offers.
"What they don't want is a cozy deal where other bidders are not invited," said a trader.
On the upside, house builders Taylor Woodrow and George Wimpey jumped 15.6 percent and 5.4 percent respectively after the two companies agreed to merge to create a market leader in Britain and combine their businesses in a difficult U.S. housing market.
Miners gained, with shares in Xstrata up 2.1 percent after the Anglo-Swiss miner said it is to buy Canada's LionOre Mining International -- the world's 10th largest nickel producer -- for 4.6 billion Canadian dollars in cash.



Courtesy of CNN