European shares fall; China concerns hurt miners

* FTSEurofirst 300 down 0.4 pct; falls from seven-week highs

* Miners drop; China policy tightening concerns linger

* Banks weak on worries over banking reform in the U.S.

By Harpreet Bhal

LONDON, March 15 (BestGrowthStock) – European shares fell on Monday,
as miners were pressured by lingering worries over monetary
tightening in top commodities consumer China, while uncertainty
over banking reform in the United States hurt financials.

By 0925 GMT, pan-European FTSEurofirst 300 (.FTEU3: ) index of
top shares was down 0.5 percent at 1,054.10 points, retreating
from a seven-week peak reached in the previous session.

Weakness in European equities mirrored falls in Chinese
shares, which were hurt by concerns Beijing may continue to
tighten liquidity to fight inflation, with the Chinese central
bank seen raising banks’ reserve requirement ratios as early as
this week.

Miners Anglo American (AAL.L: ), Kazakhmys (KAZ.L: ), BHP
Billiton (BLT.L: ), Xstrata (XTA.L: ) and Rio Tinto (RIO.L: ) lost 1
to 1.9 percent.

“There is some concern about what is going to happen in
China. It looks as if… there will be policy tightening so
therefore that will have an effect on commodity prices,” said
Justin Urquhart Stewart, director at Seven Investment

A currency spat between China and the United States also
caused some jitters. Chinese Premier Wen Jiabao spurned foreign
calls for the yuan to rise and said calls from the United States
and other big economies for China to lift the value of its yuan
currency were unhelpful, even protectionist. [ID:nTOE62D001]

Banks were also lower, on renewed concerns over banking
reform in the United States after key Republicans said in a
letter obtained by Reuters that a financial regulation reform
bill could still be worked out in the Senate despite a recent
breakdown in negotiations. [ID:nN13132277]

Barclays (BARC.L: ), Societe Generale (SOGN.PA: ), BNP Paribas
(BNPP.PA: ) and Deutsche Bank (DBKGn.DE: ) were off 0.8 to 1.6

Investors will eye details to emerge from a euro zone
meeting on Monday, where finance ministers hope to agree on a
way to provide heavily indebted Greece with financial aid,
despite French and German doubts that a deal will be reached.

The credit ratings of the United States, UK, France and
Germany, the world’s four largest triple-A sovereign debt
issuers, as well as Spain are safe but risks to their blue-chip
status have grown, a report from Moody’s Investors Service said.


The main macro attention this week will be on the latest
Federal Reserve Open Market Committee meeting, scheduled for
Tuesday, following last month’s surprise quarter-point hike in
the U.S. discount rate — seen as the start of the Fed’s
withdrawal of emergency support to the financial system.

However the majority of economists expect the Fed to make no
changes to headline U.S. monetary policy until the third-quarter
at the earliest. [ID:nN09254136]

Economic data due for Monday include the New York Fed’s
March Empire State Index at 1230 GMT and U.S. February
industrial output and capital utilization numbers at 1315 GMT.
March’s National Association of Homebuilders index will be
released at 1700 GMT, after European markets close.

On the upside, defensive pharmaceuticals gained ground.
GlaxoSmithKline (GSK.L: ), Shire (SHP.L: ), Sanofi-Aventis (SASY.PA: )
and Novartis (NOVN.VX: ) added 0.2 to 1 percent.

Among individual movers, BT Group (BT.L: ) gained 2.3 percent
as Citigroup upped its rating for the telecoms operator to “buy”
from “hold” with an increased target price, citing valuation

BSkyB (BSY.L: ) fell 2.1 percent, reversing gains from the
previous session, as Evolution Securities downgraded its
recommendation for the broadcaster to “reduce” from “neutral”.
Investing Advice

(Editing by Hans Peters)

European shares fall; China concerns hurt miners