Europe shares close lower on renewed bank jitters

LONDON, Sept 7 (BestGrowthStock) – European shares fell on Tuesday,
stubbing out a two-week rally, with banks hit by concerns over
the sector’s health and the impact of capital reform, while
miners dropped on renewed jitters over Australia’s tax plan.

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top
shares provisionally closed 0.4 percent lower at 1,061.73
points, with the STOXX Europe 600 banking index (.SX7P: ) down 1.2
percent.

The Wall Street Journal said recent stress tests in the
European banking sector understated some lenders’ holdings of
potentially risky government debt, while the German weekly Die
Zeit, quoting a draft proposal from the Basel Committee,
reported that global banks will be required to hold Tier 1
capital of 9 percent, including a 3 percent so-called
“conservation buffer”.

The Basel committee, in charge of drawing up global banking
rules, meets on Tuesday to discuss the planned reform.

“Nobody really knows yet how these reforms will affect the
banking sector and that is making the market quite nervous,”
said Oliver Roth, head trader at Close Brothers Seydler Bank in
Frankfurt.

Within the mining sector, Xstrata (XTA.L: ), BHP Billiton
(BLT.L: ) and Rio Tinto (.RIO.L: ) were off 1.2 to 1.4 percent,
after Australian Prime Minister Julia Gillard secured a second
term in office, with her government vowing to press ahead with a
new mining tax. [ID:nSGE6850I3]
(Reporting by Harpreet Bhal)

Europe shares close lower on renewed bank jitters