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Euro Shares Slide to 10-Week Closing Low

Reuters
Tuesday, 10 Jun 2008 | 12:28 PM ET

European stocks fell for the fifth straight day on Tuesday, dragged down by commodities shares to their lowest close in more than two months.

Energy stocks were the day's standout losers, giving up recent gains as crude oil prices stayed well away from highs reached on Friday.

BP and Royal Dutch Shell both dropped 2 percent and Total shed 1.3 percent. Major miners Rio Tinto and BHP Billiton were more than 2 percent lower.

The FTSEurofirst 300 index of top European shares unofficially closed 0.5 percent lower at 1,273.24 points.

"It's been another one of these dreary days," said Mike Lenhoff, chief strategist at Brewin Dolphin.

"We have received a very firm message from the ECB that interest rates are going to go up and ... for the first time in a long while we have inverted yield curves which typically has been indicative of recession," he added. "I don't think that is necessarily on the cards but the equity markets are certainty very unsettled."

Banks helped the upside, bouncing back from earlier losses as traders cited a short squeeze. UBS added 2.9 percent, Barclays rose gained 0.9 percent, Banco Santander rose 1.6 percent and BNP Paribas gained 1.3 percent.

The DJ Stoxx European banks index rose 0.2 percent after a volatile session in which it fell by as much as 2.1 percent to its lowest since late October 2003.

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