The FTSE Eurofirst 300 was down by 0.3 percent on the session Thursday as a mixed banking sector was in focus. Airlines were also mixed.

Alitalia was 0.1 percent lower to €0.95 on rumors that it wants to merge with Air France-KLM after it said it would announce a plan soon to return to profits. Meanwhile, Air France-KLM added 2.9 percent to €21.30 after it said that its first-quarter profits were up by 84 percent.

Among banks which saw gains, Piraeus Bank was 0.1 percent higher to €20.42 Banca Popolare Italiana was up by the same percentage to €9.86. Banca Popolare di Verona e Novara added 3.6 percent to €23.20 on merger talks, while National Bank of Greece advanced by 3.9 percent to €32.40 after it reported that its first-half profit was up by 65 percent.

Agriculture Bank of Greece was flat at €4.12 even though Deutsche Bank raised its target share price from €4.70 to €4.90. Meanwhile, Credit Agricole dropped 2.4 percent to €31.71 on investor concerns over the merger in Italy of Banca Intesa and Sanpaolo. Agricole holds 18 percent of Intesa. In Belgium, KBC dropped 6.5 percent to €84.05 on a caution that its second half might not live up to performance in the first half. Fortis reduced its recommendation on the banking and insurance group from “buy” to “hold”.

Elsewhere in Europe, Thales added 0.4 percent to €33.92 after Merrill Lynch upgraded the defense electronics group from “neutral” to “buy” on the basis of strong orders. On the other hand, in the semiconductors sector, STMicroeletronics dropped 2.2 percent to €12.85 on a downgrade from “hold” to “sell” from Citigroup.

In Europe on Tuesday, the FTSE Eurofirst 300 declined by 2.2 percent to close at 1,293.39. Banks saw substantial losses, as did several other key sectors.

Automobile manufacturers were down on the day. DaimlerChrysler, Porsche, and Volkswagen each declined by 2.2 percent. Porsche’s losses were in consequence of a reiteration by Citigroup of its “sell” rating on the carmaker, its setting of a target share price of €690, and its criticism of Porsch’s recent acquisition of a stake in Volkswagen. Porsche’s shares ended the day at €754.97, while Volkswagen closed at €54.82 and DaimlerChrysler ended the session with its shares trading at €40.38. Elsewhere in the sector, BMW dropped 2.3 percent to €40.03 and Renault was down 3.1 percent to €87.75.

Utilities also took a hit on the day. Amid reports that France will attempt to retain state regulation of the price of gas and electricity after market liberalization next year in order to gain the approval of parliament for the merger of Gaz de France and Suez, Gas de France dropped 1.4 percent to €26.05 and Suez was down 3.5 percent to €29.50. In addition, Electricite de France declined by 3.7 percent to €41.31.

In the banking sector, Swiss private bank Julius Baer was down 5.3 percent to SFr105.30. National Bank of Greece did almost as badly, dropping 5.2 percent to €31.30. Commerzbank declined by 4 percent to €28.87 even though it said that rumors that it has recently suffered large derivatives losses are false. Meanwhile in Belgium, KBC lost 3.6 percent to €83.55 even though it’s quarterly report was more positive than had been expected and it received an upgrade from “add” to “buy” from West LB.