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* STOXX Europe 600 down 0.1 percent
* Monte dei Paschi swings after initially failing to open
* Actelion surges to record on J&J talks
* M&A stories help Inchcape, Ontex
By Alistair Smout
LONDON, Dec 22 European shares edged lower on
Thursday, dropping further from their highest levels of the
year, though Italian blue-chips outperformed as they shrugged
off uncertainty over Monte Paschi's rescue plan.
Drugmaker Actelion provided support as it surged to
a new record high after it entered exclusive discussions with
prospective bidder Johnson & Johnson.
The STOXX 600 was down 0.2 percent, falling for a
second straight session after hitting its highest level since
Jan. 4 on Tuesday.
Outside the STOXX 600, shares in Banca Monte dei Paschi
chopped in and out of negative territory after
initially failing to open, and was last down 1.1 percent. It
failed to find an anchor investor for its private rescue plan on
Wednesday, and looks set for a state bailout.
However, Italy's blue-chip FTSE MIB rose 0.5 percent, and
Italian banks rose 0.8 percent, outperforming other
Analysts said that other Italian banks such as Intesa
Sanpaolo and UniCredit had better capital
positions, and were taking steps to improve their situations
"(Investors) are looking at Monte dei Paschi and saying it's
an individual case ... I think people would not read across to
Intesa or UniCredit," said Edmund Shing, global head of equity &
derivative strategy at BNP Paribas.
"Those two look to be on a much sounder footing, and really
look to be largely unaffected by Monte dei Paschi ... That's why
the Italian banking sector has reacted quite differently to
Monte dei Paschi."
Miners were the biggest sectoral fallers, down 1.1
percent as copper hit a 1-month low. The sector remains up 59
percent for the year, however.
The STOXX 600 is up 5.4 percent in December, and set for its
biggest monthly rise rise since October 2015.
One of the month's big winners has been Actelion, up 15
percent in December after a 37 percent surge in November, as
possible buyers circle the stock.
Actelion rose as much as 8.2 percent to hit a record high on
Thursday. The Swiss biotech company has turned back to
potential acquirer Johnson & Johnson for exclusive talks
about a "strategic transaction", in an about-turn that appears
to sideline rival suitor Sanofi.
Sanofi rose 1.7 percent.
M&A stories supported other stocks, with Ontex
rising 5.2 percent after confirming discussions of a possibly
acquisition of Hypermarcas in Brazil, while Inchcape
jumped 5.1 percent after buying a distribution business in South
Nokia was the top faller on the index, down 4.3
percent after it said it had filed a number of lawsuits against
Apple for violating technology patents.
(Editing by Alison Williams)