European shares hit reverse as Schaeffler slump drags autos

CAIRO, June 27: A drop in autos stocks after Germany's Schaeffler cut its profit outlook and disappointment over a failed buyout of Stada hit European shares on Tuesday, offsetting gains among basic resources firms and Spain's Bankia.

The pan-European STOXX 600 index fell 0.3 percent, and blue chips were 0.4 percent lower. Germany's DAX was 0.4 percent weaker.

Autos were the biggest pain point in Europe, falling 1.4 percent after German auto parts supplier Schaeffler slashed its profit guidance on growing price pressures and high costs.

Schaeffler's shares tumbled 11 percent, set for their biggest one-day fall since its 2015 IPO.

German drugmaker Stada was another sizeable faller, dropping 6.7 percent after private equity groups Bain Capital and Cinven failed to win the required shareholder acceptances to take over the firm. So far this year Stada's shares have rallied nearly 26 percent, boosted by buyout talks.

Spanish banks were a bright spot as investors cheered Bankia's move to buy smaller peer BMN in a deal worth around $924 million, a further step in cleaning up Spain's beleaguered banking sector. Bankia's shares rose more than 4 percent

Gains among mining firms Anglo American, Rio Tinto and BHP Billiton helped prop up the basic resources sector, which gained 1.3 percent. Britain's commodities-heavy FTSE 100 <.FTSE. index was flat.