LONDON (ShareCast) - European shares moved into negative territory midday with banks suffering the most as concerns over big losses in the sector refuse to die down.

UBS, Switzerland's biggest bank, is the biggest faller in the sector, with ING Groep also sharply lower.

Veolia slid after it said that high oil prices and the currency impact means its net income growth objective "could be difficult to achieve in 2008."

Wavin dropped after it warned first-half EBITDA margin will be lower than last year, causing Petercam to cut its stance on the Dutch building materials group to 'sell' from 'reduce'.

In M&A news, Sanofi-Aventis rose after Czech manufacturer Zentiva rejected PPF Group’s takeover offer and said it ‘noted’ the French group’s rival bid.

Private equity firm PAI Partners announced it had bought a 18% stake in Atos Origin, becoming the French IT firm’s primary individual shareholder.

Germany’s Thyssenkrupp got a lift from Merrill Lynch as the brokerage upped its to 'neutral' from 'underperform' and lifted its price target to €43 from €39 per share.

The German Dax is 51 points lower at 6,669 the French CAC dropped 58 points to 4,532, while the Swiss market fell 77 points to 7,081.

In economic news, German producer prices increased by 1.0% month-on-month in May and by 6.0% on the year, the higher yearly increase since July 2006, according to the German Statistics Office.

Dutch consumer spending increased 2.1% year-on-year in April, according to the Central Bureau of Statistics.

Swiss producer and import prices in March rose 1.2% from April and 3.9% from last year, the Swiss Federal Statistics Office said.

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