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European shares fall after ECB decision on Greek debt
* FTSEurofirst 300 drops 0.4 pct
* Greek banking stocks plunge 14 percent
By Blaise Robinson and Sudip Kar-Gupta
PARIS/LONDON, Feb 5 (Reuters) - European stocks fell on Thursday after the European Central Bank abruptly cancelled its acceptance of Greek bonds in return for funding, shifting the burden onto the country's central bank.
Greek banking shares sank, with the Athens Stock Exchange FTSE Banks Index dropping 14 percent, driving Greece's broader ATG equity index down by 5.6 percent.
Alpha Bank (Other OTC: ALBWF - news) shares were down by 10 percent and Eurobank shares plunged 14.6 percent. Shares (Berlin: DI6.BE - news) in National Bank (NYSE: NBHC - news) of Greece fell 12.3 percent.
"The ECB took the market by surprise," one Athens-based trader said. "Given the turn of events and the fact that Greek banks had rallied over 50 percent in the last five sessions, it was a trigger for profit taking."
The ECB's move, which means the Greek central bank will have to provide its banks with tens of billions of euros of additional emergency liquidity in the coming weeks, was a response to what many in Frankfurt see as the Greek government's abandoning of its aid-for-reform programme.
By 0857 GMT, the FTSEurofirst 300 index of top European shares was down 0.4 percent at 1,481.86 points.
Southern European markets were among the most affected by the ECB move, with Italy's MIB index down 1.3 percent and Spain's IBEX down 1.1 percent.
"Despite all the wishful thinking in Athens, the ECB has decided to use its veto. It's up to the Greek government now, and solutions have be found very quickly," Mirabaud Securities senior equity sales trader, John Plassard, said.
On the earnings front, BNP Paribas (Xetra: 887771 - news) said cost cuts increased to cover growing compliance and control expenses, sending shares in France's biggest bank down 3.7 percent.
Bucking the trend, shares in French drugs firm Sanofi (NasdaqGM: GCVRZ - news) rose 2.4 percent after saying it will name a new chief executive in the coming weeks, and predicting that euro weakness could boost profits this year.
Shares in Finnish tyre maker Nokian Renkaat (Other OTC: NKRKF - news) , which has a major exposure to Russia, jumped 9.8 percent after it kept its dividend unchanged at 1.45 euros per share. The market had expected a cut in its payout.
Sweden's Securitas rose 8 percent after posting a bigger-than-expected rise in fourth-quarter core profit and said it had now fully offset a staff cost increase stemming from U.S. healthcare reforms.
Today's European research round-up
============================================================ For rolling updates on what is moving European shares please click on ============================================================ For pan-European market data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. STOXX Europe index.................................. Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................
Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. CAC-40............... World Indices..................................... Reuters survey of world bourse outlook......... Western European IPO diary......................... European Asset Allocation........................ Reuters News at a Glance: Equities................. Main currency report:................................. (Additional reporting by George Georgiopoulos in Athens; Editing by Louise Ireland)
