European shares fall on China worries; banks weigh

LONDON, Jan 26 (BestGrowthStock) – European shares fell in early
trade on Tuesday, extending their decline for a fifth day after
China implemented a previously announced clampdown on lending,
with banks and commodities the major fallers in Europe.

By 0810 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index was down 0.7 percent at 1,011.34 points.

Sentiment was knocked after banking sources said China had
implemented its latest rise in bank reserve ratios to curb
excessive lending. [ID:nSGE60P03Q]

“Since China has started its banking proposals … this has
generally been seen as a concern,” said Justin Urquhart Stewart,
director at Seven Investment Management.

“How do you let the air out of balloon easily, the answer is
with difficulty … there is a level of Chinese uncertainty which
hangs as a cloud over us.”

Banks took the most points off the pan-European index. Banco
Santander (SAN.MC: ), HSBC (HSBA.L: ), UniCredit (CRDI.MI: ) and BNP
Paribas (BNPP.PA: ) lost 0.9 to 1.8 percent.

Commodities were under pressure as crude (CLc1: ) and metal
prices retreated on concerns over weaker global demand.

Oil stocks BG Group (BG.L: ), BP (BP.L: ) and Total (TOTF.PA: )
lost 0.5 to 1.1 percent, while miners Anglo American (AAL.L: ),
Antofagasta (ANTO.L: ), Rio Tinto (RIO.L: ) and Xstrata (XTA.L: ) fell
1.5 to 3 percent.

On the upside, German engineering conglomerate Siemens
(SIEGn.DE: ) gained 2.2 percent after it posted first-quarter
operating earnings that far exceeded expectations.

Stock Market Money
(Reporting by Joanne Frearson)

European shares fall on China worries; banks weigh