* FTSEurofirst down 0.5 percent
* Healthcare, food outperform as investors opt for safety
* Miners wane after weak China service data
* Banks fall as HSBC announces hit to Q3 profit
* Ryanair gains as the airline raises its outlook
By David Brett
LONDON, Nov 5 European stocks edged lower in
cautious trade on Monday as investors opted for safer havens
ahead of a too-close-to-call presidential election in the United
States this week.
By 0835 GMT, the FTSEurofirst 300 shed 5.93 points,
or 0.5 percent, to 1,109.26, with investors hedging their bets
after the index rose 1.6 percent last week, nearing the top of
its recent trading range around 1,120.
"Tuesday's U.S. presidential election dominates the week's
events," Ian Williams, strategist at Peel Hunt, said.
"Re-election for Obama may be priced into the markets, as is
some prospect of a compromise to delay the impact of the 'fiscal
cliff'; with the Republicans retaining control of the House -
although the outcome is not yet certain," he said.
A rise in the dollar index to its highest level since
central banks acted to support the global financial system in
early September provided evidence that investors are looking for
protection ahead of the election.
In equities, food and beverages and healthcare
outperformed the broader market.
Basic resource stocks weighed most on the index with
sentiment further dented after data showed China's service
sector unexpectedly weakened in October.
Banks fell too as investors opted for more defensive
assets, with heavyweight HSBC, which shed 1.8 percent
after results, also dragging on the sector.
Europe's biggest bank's third-quarter profit took a $1.15
billion hit to cover a potential U.S. fine for lax anti-money
laundering controls and UK mis-selling.
Among individual movers, mail delivery firm Post NL
fell 6.8 percent after saying it expects mail volume
to decline by to 10 percent.
That knocked peer TNT Express which shed 3.1
percent. TNT recently announced a 12 percent fall in quarterly
Some 48 percent of European companies have missed profit
expectations so far in the third-quarter, lagging a far better
performance from U.S. peers.
The index's top gainers were those companies that offered
some light for investors at the end of a gloomy earnings tunnel.
A 10 percent jump in first-half profit and raised guidance
propelled Irish low cost airline Ryanair 9 percent
higher, helping lift peer Easyjet and the broader travel
and leisure sector.
Weir climbed 4.2 percent after the firm assuaged
concerns over the outlook for engineers by saying it was on
track to meet expectations for the full year.
Despite nearly half the companies that have so far reported
in Q3 missing expectations, analysts have increased
fourth-quarter estimates by around 1 percent for those
But broader maket moves continue to be dominated by macro
themes, adding to investor uncertainty.
As well as the U.S. presidential election there is
once-a-decade power transfer in China, and Greece's attempt to
gain political support for measures to obtain further aid.
"The fact that you have so many in the same week makes
forecasting where the markets may be by Friday next to
impossible," a London-based trader said.