European shares fell to a two-month closing low led by banking stocks as concern grew the sector could be faced with further problems stemming from the meltdown in the US sub-prime mortgage market.
The London FTSE 100 index shed 1.08% to close at 6,291 points. In Paris the CAC 40 lost 0.67% to reach 5,524, while in Frankfurt the DAX fell 0.71% to end the session at 7,612. Financials played their part in the falls. Royal Bank of Scotland led decliners and fell 4.3%, HSBC dropped 1.5%, Barclays 4.1% and UBS almost 4%.
US stocks advanced as gains in energy company shares and positive news in the tech sector offset declines in financial company shares on credit market concerns.
Cisco Systems said its board had approved an additional $10 billion for buying back company shares, while Hewlett-Packard Co was upgraded to ‘overweight’ by Morgan Stanley. The Dow Jones was up 0.68% to 13,199, while the Nasdaq rose 0.61% to 2,634.
Dublin's ISEQ was down this evening despite making gains this afternoon, though the banking sector fared better.
The ISEQ shed 0.2% points to stand at 6,969 by 5.25pm, with Bank of Ireland up 21 cent to €10.13 and AIB edging up 25 cent to €14.73. Shares in C&C were up 10 to €4.52 after it announced a restructuring programme yesterday, which should result in €10m savings annually.
In Asia, Tokyo's key Nikkei 225 index stumbled 1.5%, or 242 points, lower to close at 15,155 on the back of weaker banking and export shares. In Hong Kong, the Hang Seng fell for a second straight day, ending 1,137 points lower at 27,614.
