January 23, 2017 / 8:27 AM / 3 years ago

European shares weighed down by banks, Essentra warning; Generali surges

MILAN, Jan 23 (Reuters) - European shares fell in early trading on Monday, weighed down by weaker banks and a profit warning at filter products maker Essentra, while insurer Generali was boosted by takeover talk.

The STOXX 600 fell 0.7 percent by 0819 GMT, extending last week’s drop, as the region’s equity markets reacted to a protectionist tone struck by U.S. President Donald Trump in his inauguration speech on Friday.

Essentra fell 12 percent, topping losers on the pan-European index, after the UK firm warned that full-year adjusted operating profit would miss or meet only the lower end of its forecasts.

Generali rose 4.6 percent. Italian newspaper La Stampa reported on Saturday that Intesa Sanpaolo could take a stake in Generali, possibly teaming up with German insurer Allianz , which is looking for acquisition targets.

Allianz fell 1.5 percent, while Intesa Sanpaolo fell 2.3 percent, helping drag the European banking sector down 1.5 percent, the biggest sectoral loser in Europe. (Reporting by Danilo Masoni, Editing by Vikram Subhedar)

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