Banks drag down European shares

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European shares edged lower in early trading on Monday, with investors focusing on a meeting of euro zone finance ministers on Greece and taking some profits following last week's strong performance by major stock indexes.

At 10:04 SA time, the FTSEurofirst 300 index of top European shares was 0.3 percent lower at 1,106.69 points after gaining for five straight sessions and surging 4 percent last week, the best weekly performance since early December last year.

Analysts said the market had potential to bounce back again on any positive outcome of the euro zone meeting, in which the ministers and International Monetary Fund officials will again try to reach a deal to get international lenders to release a new tranche of aid to debt-stricken Greece.

“Last week was very good for the markets and it seems that investors are taking a breather ahead of the euro zone meeting. There is some caution, but it is also clear that Greece's lenders will not allow the country to fail. A Greek default is not an option,” Koen De Leus, senior economist at KBC, in Brussels, said.

“We are on the optimistic side. Investors should have stop-losses in place to minimise their losses, but should be prepared to buy the dips.”

Banks, down 0.5 percent, were the top sectoral decliner. Barclays fell 3.6 percent after news that Qatar Holding has cashed in on its remaining warrants in the bank. - Reuters

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