BP weighs on European shares; Portugal Tel up

* FTSEurofirst 300 index down 1.1 percent

* BP slips after U.S. launches criminal probe

* Portugal Telecom soars on Telefonica Vivo bid

* For up-to-the minute market news, click on [STXNEWS/EU]

By Joanne Frearson

LONDON, June 2 (BestGrowthStock) – European shares fell on
Wednesday, with BP (BP.L: ) down after the U.S. launched a
criminal probe into the Gulf of Mexico disaster and banks
slipping on worries over the recovery from the euro zone crisis.

By 0856 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index was down 1.1 percent at 991.62 points.

BP lost 2.4 percent, extending its 13.1 percent drop in the
previous session. The company has lost more than a third of its
market value, or about 46 billion pounds ($67 billion), since
the crisis began.

The U.S. FBI and other federal agencies are aggressively
investigating the spill and “if we find evidence of illegal
behaviour, we will be forceful in our response,” U.S. Attorney
General Eric Holder said on Tuesday. [ID:nN01128586]

“There was a sharp drop off in the U.S. overnight on the
news of the U.S. criminal and civil investigation,” said Will
Hedden, sales trader at IG Index. “We are coming in line with
the selloff in the U.S.”

Energy stocks slipped as crude (CLc1: ) fell 0.9 percent as
the negative sentiment pervaded in the financial markets. BG
Group (BG.L: ), Royal Dutch Shell (RDSa.L: ), Total (TOTF.PA: ) and
Cairn Energy (CNE.L: ) were down 1.8 to 3 percent.

The European index has lost 10.5 percent since mid-April
when fears intensified that a sovereign debt crisis in the euro
zone could derail the global economic recovery.

“The main worry is still the debt crisis in Europe and the
impact it will have on growth in the second half,” said Philippe
Gijsels, head of research at BNP Paribas Fortis Global Markets
in Brussels. “Banks are the epicentre of the crisis.”

Banks took the most points off the index after small losses
in the previous session. HSBC (HSBA.L: ), Banco Santander (SAN.MC: )
and Barclays (SAN.MC: ) slipped 1.9 to 3.3 percent.

PORTUGAL TELECOM GAINS

On the upside, Portugal Telecom (PTC.L: ) soared 6.3 percent
after Spain’s Telefonica (TEF.MC: ) raised its bid for PT’s stake
in Brazilian mobile phone company Vivo (VIVO4.SA: ) to 6.5 billion
euros ($7.9 billion) from 5.7 billion euros. [ID:N01124414]

GlaxoSmithKline (GSK.L: ) rose 1.3 percent after Jefferies
raised its rating for the company to “buy” from “hold”.

Later in the session, investors will eye the May U.S.
Challenger layoffs report, due at 1130 GMT, a precursor to
Friday’s U.S. nonfarm payrolls.

April U.S. pending home sales will be released at 1400 GMT.

In other news, German Chancellor Angela Merkel’s cabinet
passed a draft bill that will ban naked short selling of euro
zone government bonds and German shares, coalition sources told
Reuters.

Meanwhile, the euro was higher after some of the world’s
biggest central banks said they would not stop investing in the
single currency. [ID:nTOE650069]

Across Europe, the FTSE 100 (.FTSE: ) index was down 1.3
percent, Germany’s DAX (.GDAXI: ) was 1.7 percent lower and
France’s CAC 40 (.FCHI: ) fell 1.3 percent.

Stock Market Today
(Editing by Hans Peters)

BP weighs on European shares; Portugal Tel up