EUROPE MARKETS: Europe Stocks Mostly Up, Chemicals Off

By Barbara Kollmeyer, MarketWatch

Most European stocks traded higher on Thursday, following on from global equity gains, though the major indexes were flat as broker downgrades in the chemical sector hit several stocks, while Subsea 7 SA tumbled on an earnings update.

The Stoxx Europe 600 index was flat at 284.55, following a rise of 1.7% in the prior session, which marked the second straight day of gains.

Asia stocks moved higher on Thursday, following up on a strong showing for Wall Street, which rallied as a downward revision for economic growth cooled talk of a tapering in the Federal Reserve's bond-buying program. Europe indexes stayed flat ahead of a clutch of U.S. data and Fed speakers. See preview

Shares of Subsea 7 SA sank 14% after the Norwegian oil-field services group gave an update on its anticipated losses for an offshore Brazil project. As a result, the company said it no longer expects full-year adjusted earnings (before interest, taxes, depreciation and amortization) to progress compared with 2012.

Also lower were a handful of chemical companies. J.P. Morgan Cazenove made several cuts to the sector, saying "after three years of tailwinds, the good times may be over," and potential headwinds lie ahead. BASF SE , Lanxess AG and Solvay SA were cut to underweight from neutral.

Those shares were off 2.7%, 5.4%, and 3.8% respectively.

Losses for heavyweight BASF kept the German DAX 30 index pinned flat at 7,937.59. On the French CAC 40 index , down 0.2% to 3,717.74, Solvay was the leading decliner. Shares of Societe Generale SA fell 1%.

European finance ministers reached an agreement early Thursday on rules for winding down insolvent banks, inking a deal in which banks' shareholders, creditors and big depositors would take the first hit in the event of a bank crisis. The deal still needs legislative approval from the European Parliament.

In Spain, shares of Bankia SA rose 3.3% after it sold its stake in International Consolidated Airlines Group SA for 675 million euros ($879 million). Shares of IAG fell 1.2% in London.

The FTSE 100 index rose 0.3% to 6,185.96, as resource stocks pushed higher. Shares of Royal Dutch Shell PLC (RDSA) was up nearly 1%, while miner BHP Billiton PLC lifted 1.1%.

Mining firm Eurasian Natural Resources Corp. fell 0.8% after UBS cut those shares to neutral from buy.

Leading the gains in London, shares of Smiths Group PLC rose 2.5% after a lift to buy from neutral at UBS, which said shares are not reflecting upside from a potential sale of its medical division.

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