Europe midday: Shares erase early gains as German business morale falls

(Sharecast News) - European shares slipped into the red on Monday as German business morale worsened, with bank stocks also in focus after Italy's UniCredit offered to buy rival Banco BPM for around €10bn. The pan-European Stoxx 600 was down 0.05% at midday, erasing morning gains, to sit at 508 points.

Banco BPM shares gained on the news, while UniCredit stock fell around 4.2%.

Shares in Commerzbank fell more than 6% after UniCredit said that its offer for Banco BPM was separate from its plans to buy the German lender and that any bid for it would come after Banco BPM had been integrated.

Business morale in Germany worsened this month, with sentiment in both the struggling manufacturing sector and services industries taking a hit, according to the IFO Institute.

The IFO business climate Index, a monthly index based on the responses of around 9,000 private-sector firms, fell to 85.7 in November from 86.5 the month before, coming in shy of the 86.0 consensus forecast.

The index had temporarily rebounded in October after hitting a low of 85.4 in September, which tied its lowest reading in more than four years.

Elsewhere in equities, shares in B&Q owner Kingfisher slumped as the DIY chain operator nudged down the midpoint of its annual profit guidance after a mixed third quarter, in which group like-for-like sales edged lower.

Shares in Norway's Tomra and Envipco - both makers of deposit return systems - surged 10% on reports that the government had not met its plastic bottle collections targets and would have to introduce a deposit system.

Reporting by Frank Prenesti for Sharecast.com