(02.07.2013) EU STOCKS down as insurers come under pressure

European stock markets traded lower in early action on Tuesday as investors appeared to cash in on gains seen from the prior session’s rally. Broker moves weighed on shares of RWE AG, Hannover Re SE and Munich Re, but lifted Burberry Group PLC and Michelin.

The Stoxx Europe 600 index  fell 0.3% to 287.52, following a gain of more than 1% in the prior session, after upbeat economic data in Europe and the U.S.

Greece was in focus on Tuesday as Troika inspectors, who yesterday returned to Athens for an assessment of the Greek austerity program, gave the country three days to reassures its international lenders that it will fulfill the bailout conditions. Otherwise, it will not receive the next 8.1 billion euro tranche of aid.

Meanwhile, Fresenius Medical Care AG & Co. KgaA  was the biggest decliner, tumbling nearly 10%.

Utility company RWE  shares fell 2.3% after Morgan Stanley cut shares to equal-weight from overweight and cut its price target to €28 from €36 a share.

Insurers were also in a negative spotlight. J.P. Morgan Cazenove said it expects a 10% decline in natural catastrophe reinsurance and sees flat rates on other reinsurer lines, and reduced its 2014 earnings-per-share estimates for key reinsurers. In light of this, Hannover Re SE  was cut to underweight from neutral, leaving shares nearly 2% lower. Shares of Munich Re  fell 0.8% as it was dropped to neutral from overweight. Swiss Re AG  fell 0.8% after being cut to neutral from overweight.

The German DAX 30 index  fell 0.4% to 7,955.32, dragged by Munich Re and Fresenius.

On the upside, shares of Burberry Group PLC  rose around 4% after HSBC lifted the luxury retailer to overweight from neutral, and lifted its price target to 1,750 pence from 1,530 pence.

Those gains helped London keep losses in check, with the FTSE 100 index  flat at 6,309.87.

Shares of Michelin  added 2.4% after UBS upgraded shares to buy from neutral.

Those gains supported the French CAC 40 index , which kept losses to a fall of 0.2% to 3,761.09.

Analysts said traders were growing cautious ahead of central bank meetings in the U.K. and Europe on Thursday, along with all-important U.S. payrolls data later this week.

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