European shares pull back on U.S. holiday, Banks, miners fall; UBS bucks trend after update reassures

By Sarah Turner, MarketWatch
July 4, 2008

LONDON (MarketWatch) - European shares drifted lower on Friday in subdued trade as banks declined and miners also lost ground, though UBS rallied after the Swiss bank quelled fears that it would have to make another major fund raising effort.
The pan-European Dow Jones Stoxx 600 index dipped 0.2% to 282.55, after closing with strong gains on Thursday on the back of a rebound in the banking sector.
But banks struggled to hold onto those gains on Friday as traders weighed up better news from the investment banking sector with more downbeat news from a lender more sensitive to domestic economic conditions.

On the plus side, shares in Swiss banking giant UBS jumped 5% after it said that it expects to roughly break even in the second quarter, after a 3 billion Swiss franc ($2.93 billion) tax credit helped offset further write-downs, and added it doesn't need to raise more capital
The bank's statement came as a relief to investors following fears that it could face a loss of 4 billion or 5 billion francs, potentially leading it to ask shareholders for a further cash injection. See UBS story.
Peer Credit Suisse also traded higher, up 2%.
However, shares in stricken U.K. mortgage bank Bradford & Bingley fell 7.4% after it said that U.S. private equity group TPG Capital has withdrawn from a deal to inject cash, but that major shareholders will still back a 400 million pound ($793 million) capital raising.
The bank said TPG withdrew after rating agency Moody's downgraded the group's long-term debt ratings to Baa1 from A3.
Other banks under pressure included Royal Bank of Scotland , down 1.4% and Barclays , down 1%.
Of national indexes, the U.K. FTSE 100 index lost 0.8% to 5,434.60, the German DAX 30 index lost 0.3% to 6,333.84 and the French CAC-40 index declined 0.5% to 4,323.53.
U.S. stocks ended mostly higher on Thursday after a benign reaction to the government's report on employment, which declined only a bit more than expected in June. See Thursday's Market Snapshot.
U.S. markets are closed on Friday for the July 4 Independence Day holiday. In Asia, Japan's Nikkei 225 lost ground for the 12th time in a row. See Asia Markets.
Miners lost ground again, extending a steep drop earlier in the week sparked by lower coal prices. Shares in BHP Billiton fell 1.4% while Anglo American shares declined 2%.
Natural gas producer BG Group dipped 0.4% after Origin Energy , Australia's largest coal seam gas producer, rejected its A$13.8 billion ($13.3 billion) takeover bid.
Origin said that the offer does not adequately reflect the company's assets and business prospects.
BG Group unveiled the A$15.50-a-share hostile bid last week.
However, autos moved higher, despite light sweet crude prices staying over $145 a barrel in electronic trading, with Porsche shares up 1.2%.
The gains followed reports, citing traders, that Merrill Lynch upgraded the luxury sports car maker to neutral from underperform. End of Story