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Date: Thursday 21 Aug 2008

LONDON (ShareCast) - European markets are lower in calm midday trade as concerns about more write-downs in the financial sector refuse to die down.

Banks have fallen back following further losses at US mortgage financiers Freddie Mac and Fannie Mae overnight on worries that the government will have to take them over. France’s BNP Paribas and Germany’s Hypo Real Estate have dropped.

Air France-KLM and German luxury carmaker BMW are also lower as oil prices continue to rise. Crude currently costs around $117 a barrel on the New York Mercantile Exchange.

Holcim has dropped after the Swiss cement maker’s second-quarter net profit fell to 696m Swiss francs compared with 2.07bn francs last time because of high energy prices and fewer orders.

"The cement industry, with its energy-intensive production process, is feeling the impact of the rapid increase in the price of thermal and electrical power sources very directly," said Holcim.

"So far, the resulting cost increases have only partially been passed on to customers and with a delay," it added.

In M&A news, privately owned Schaeffler has increased its offer for German auto parts maker Continental to €75 per share, up from €70.12, but it has also agreed to limit its stake to a maximum 49.99% until at least 2012.

The German Dax is 57 points lower at 6,260, the French CAC dropped 51 points to 4,313, while the Swiss market fell 76 points to 7,023.

In economic news, Sweden's jobless rate fell to 5.8% in July compared to a 8.1% jump in the previous month.

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