London suffers jubilee hangover

German trader takes orders as Dax rebounds from losses

LONDON, England (CNN) -- European markets ended mixed on Wednesday as UK investors went on a selling spree after a four-day holiday, encouraged by a weak start on Wall Street.

But as London stocks lost ground, most Continental Europe markets rose as investors bought up stocks that had been beaten down in recent sessions.

London's FTSE 100 index fell 1.9 percent to 4,989.1, while the CAC 40 blue chip index in Paris rose 0.3 percent to 4,079.51 and Frankfurt's electronically traded Xetra Dax was up 0.1 percent to 4,627.98 in late trading (the German market was set to close at 1900 GMT).

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, lost 0.6 percent.

"Until we get confirmation from data that recovery in economic conditions is being reflected in corporate profits, we are going to be in for this kind of mood swing environment," Richard Champion, a European equities fund manager at Pavilion Asset Management, told Reuters.

"Consensus earnings estimates for Europe are fairly punchy this year and we need those numbers to come through. My advice would be to hang in there as forward indicators still look as if they should produce a bounce for the year as a whole."

The energy sector came under pressure as oil prices fell after U.S. industry data released on Tuesday showed a surprise jump in U.S. crude stocks last week. Brent Crude futures for July was down 40 cents to $24.05 in late afternoon trading in London.

Europe's second-largest oil company BP (BP) lost 3.4 percent to 565 pence and Shell Transport & Trading (SHEL), which owns 40 percent of Royal Dutch/Shell, the No.1 oil company, fell 2.8 percent to 515 pence.

UK telecom stocks fell, in line with declines in the U.S. and Europe, as investors played catch up after the extended weekend in celebration of Queen Elizabeth II's 50 years on the throne.

Vodafone (VOD), Europe's biggest mobile phone operator, dropped 3.2 percent to 99.5 -- but off its session lows -- and the region's fifth-biggest operator mmo2 (OOM) lost 5.9 percent to 40 pence.

AstraZeneca (AZN), Europe's second-largest drugmaker, lost 1.9 percent to 2,991 pence. The company said earlier on Wednesday that it was a step closer to winning U.S. regulatory approval for its biggest new drug hope, cholesterol fighter Crestor. (Full story)

On the continent, technology stocks were outperforming their UK counterparts, managing to hold on to most of their gains from the session.

Cap Gemini (PCAP), Europe's biggest computer services group, rose 1.3 percent to 51.40 euros in Paris and STMicroelectronics (PSTM), Europe's largest chip maker, was up 0.3 percent to 26.69 euros.

Nokia, the world's largest mobile phone maker, gained 1 percent -- recouping some of its losses from recent sessions, while rival Ericsson, the world's biggest mobile phone equipment maker, rose 2.4 percent -- after being flat for most of the session -- following comments from its chief executive who warned the downturn in the telecoms market would not improve until next year. (Full story)

Thomson Multimedia (PHO), a French consumer electronics maker, fell 4.5 percent to 25.98 euros after Japanese chip and electronics group NEC Corp. said it would sell 10.9 million of its 13.9 million holding in the company.

Fiat, Italy's largest industrial group, rose 0.2 percent to 12.97 euros in Milan. On Wednesday, the struggling carmaker denied speculation that it would soon exercise its option to sell it stake in loss-making car division Fiat Auto to General Motors, as a new survey showed Fiat's Italian market shrank in May. (Full story)

In the media sector, Vivendi Universal (PEX) gained 1.6 percent to 30.85 euros after its recent slide on debt concerns and lack of plans for assets sales. On Wednesday, a newspaper reported that Chief Executive Jean-Marie Messier received a bonus worth 250 percent of his salary, despite the company posting a 13.6 billion euros loss last year. (Full story)

The AEX in Amsterdam index rose 0.1 percent and Milan's MIB30 index gained 0.2 percent, while the SMI in Zurich slipped 0.2 percent.

In the U.S. on Wednesday, a report showing strength in the services sector of the economy gave a lift to stocks after a weak start, as investors found some comfort in the resilience of the U.S. economy.

The Institute of Supply Management said activity in the services sector rose sharply in May to 60.1 from 55.3 the month before.

At midday, the Nasdaq composite index was up 11 points, or 0.7 percent, to 1,588.74, while the Dow Jones industrial average was up 79.47 points, or 0.8 percent, to 9,767.31.