Dow Jones/London
European stock markets ended lower yesterday as hopes for progress at this week’s European Union summit were tempered by German objections to an alleged plan to boost the firepower of the eurozone’s bailout fund. The Stoxx Europe 600 index lost 0.2% to close at 241.44. Shares of ING fell 4.7% after the bank said it would take a fourth-quarter charge of €900mn to €1.1bn ($1.2bn to $1.4bn) from its US annuity business. Among other banks, Societe Generale declined 1.3%, Intesa Sanpaolo dropped 2.8% and BBVA fell 2%. Souring the investors’ mood, an unnamed German official said the government was against combining the eurozone’s €440bn ($593.1bn) interim bailout fund, and the permanent €500bn European Stability Mechanism, according to media reports. The news came after the Financial Times had reported on Tuesday that officials were considering running the two funds alongside each other. But the German official reportedly said it had already been decided that the ESM would take over from the European Financial Stability Facility. The official also said that divisions may keep agreement on a debt-crisis strategy from being hammered out by all 27 EU members at this week’s summit in Brussels. “It is not the serene passage to the summit that had been hoped for when on Monday we seemed to have a Franco-German push for closer fiscal integration,” said Stephen Pope, managing partner at Spotlight Ideas. John Ventre, fund manager at Skandia Investment Group said markets are facing some stiff resistance levels, which are largely hinging on the summit outcome. “Ultimately, the Europe Stoxx 600 could run to 250-253 ahead of concrete news out of the summit, but I don’t see us getting through those levels without that,” he said. The French CAC 40 index slipped 0.1% to close at 3,175.98, with losses for banks weighing. Retailer Carrefour SA fell nearly 3%. A report in the French daily Le Figaro said yesterday that the group may buy its main French franchisee Guyenne et Gascogne and fund the purchase with Carrefour shares. German retailer Metro AG fell 2.7% after broker downgrades. Citigroup cut it to sell from neutral and HSBC to neutral from overweight after the retailer lowered its 2011 forecast for sales and earnings on Tuesday. Car shares also fell, with Peugeot declining 3.6% and Renault off 2,4% in Paris. The German DAX 30 index ended 0.6% lower at 5,952.64, with shares of Deutsche Bank AG down 0.5%. On the upside, Austrian utility Verbund rose 3% after Morgan Stanley raised the stock’s rating to overweight from equal weight, saying a recent selloff had been overdone. The UK’s FTSE 100 indexfell 0.4% to settle at 5,546.91, led by losses for financials. Royal Bank of Scotland Group fell 2%.