(ADVISORY- Follow European and UK stock markets in real time on
the Reuters Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets)
Adds details, updates prices)
* STOXX down 0.5 percent
* Italian index hits 6-week lows on political, bank worries
* British midcaps Essentra, Mitie slump after warnings
* Aixtron falls as U.S. regulator opposes China takeover
* Losses limited by rebound in miners, energy stocks
By Danilo Masoni
MILAN, Nov 21 European shares fell on Monday,
weighed down by losses among pharmaceuticals and financials and
by worries that next month's Italian referendum on
constitutional reform could create political instability.
The pan-European STOXX 600 fell 0.5 percent by 1000
GMT. Italy's blue chip index fell 1 percent after hitting its
lowest point since end-September as investors priced in a
possible rejection of Prime Minister Matteo Renzi's reform plan.
Investors are concerned that if Renzi loses the referendum,
as the latest polls predict, the Italian government would fall
into a serious crisis, threatening to destabilise the whole
continent ahead of a string of national elections next year.
"The growing focus on political risk is contributing to
Italian assets' difficulties," said JCI Capital portfolio
manager Alessandro Balsotti, who noted how continued uncertainty
over multi-billion-euro capital increases at UniCredit
and Monte dei Paschi di Siena had also been weighing.
Among the biggest weights on the STOXX were Swiss-listed
heavyweight drug makers Novartis and Roche,
which fell 1.4 and 0.6 percent respectively; and big banks
Lloyds and UBS, both down more than 1 percent.
German chip designer Aixtron fell more than 6
percent after a U.S. regulator moved to stop a planned Chinese
takeover. The move raised concerns the deal would
not go through.
"It is totally unclear whether the acquisition by Chinese
investors will take place," said DZ Bank analyst Harald
Schnitzer, who has a sell rating on the stock.
But BCP Millennium rose more than 3 percent after
agreeing on a stake sale to Chinese conglomerate Fosun
in a deal that would help the Portuguese lender to beef up its
UK midcaps were also on the backfoot after Essentra
and Mitie warned over their outlook, raising
concerns over the impact of Brexit on domestic UK companies.
Essentra fell 19 percent and Mitie slumped 10 percent.
Gains in mining and energy stocks helped limit the broader
market losses, as the sectors benefited from rising metal prices
and hopes OPEC was moving closer to reaching an agreement to cut
output when it meets next week.
Markus Huber of stockbrokers City of London Markets said
concerns over the Italian vote on Dec. 4 as well as the
likelihood that the U.S. Federal Reserve will raise rates next
month kept investors cautious, even though broader sentiment
"At this stage more good economic data will be needed to
tempt traders to increase their risk exposure further," he said.
(Reporting by Danilo Masoni; Editing by Mark Trevelyan)