Euro Stocks Close Lower; Banks Recover

European shares closed lower on Wednesday, extending a losing streak to three days, after US President Obama's plan to stem foreclosures met with skepticism and fears of a deepening recession weighed.

The pan-European FTSEurofirst 300 index of top shares was down 0.3 percent at 763.52 points at the provisional close of a volatile session, having been up as much as 770.14 points and as low as 750.88 points.

President Barack Obama unveiled his much-anticipated plan to fight the US housing crisis, and pledged up to $275 billion to help stem a wave of foreclosures sweeping the country.

"It's another one of these things where just a huge sum of money is being thrown at various sectors of the economy," said Mike Lenhoff, chief strategist at Brewin Dolphin.

"We do not really know how effective the whole thing will be, though it should prevent a bad situation from degenerating into something worse," he said.

The banking sector was the biggest gainer on the index, recovering from falls on Tuesday sparked by worries over exposure to emerging European countries.

Societe Generale gained 2.7 percent. The group said it is to reorganize its investment bank arm by shaking up its structure and cutting jobs and bonuses after posting a 2008 loss in the unit, albeit a smaller one than most rivals.

HSBC, Banco Santander, and BNP Paribas were up 1.8-2.6 percent.     

However, Royal Bank of Scotland lost 12.6 percent on capital raising fears.

Across Europe, the FTSE 100 index was down 0.7 percent, Germany's DAX was down 0.3 percent and France's CAC 40 was 0.04 percent lower.

• For More on SocGen, Commerzbank & ING's Earnings
• For More on Heineken, Carlsberg Earnings

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