RPT-European shares slip on banking worries

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* FTSEurofirst 300 index down 0.4 percent

* Banks slip after WSJ report, Basel

* Miners down on tax worries

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

By Joanne Frearson

LONDON, Sept 7 (BestGrowthStock) – European shares slipped on
Tuesday to move below a key index retracement level, with banks
lower after a Wall Street Journal report on the recent stress
tests renewed concerns over the sector’s health.

Worries over capital reform in banks also weighed on the
sector. The Basel committee, in charge of drawing up global
banking rule, is set to discuss planned reform on Tuesday.

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”.

Banking stocks fell, with the STOXX Europe 600 Banks (.SX7P: )
index 1.2 percent lower. Credit Agricole (CAGR.PA: ), Commerzbank
(CBKG.DE: ), Deutsche Bank (DBKGn.DE: ) and BNP Paribas (BNPP.PA: )
fell 1.5-2.7 percent.

The Wall Street Journal said Europe’s recent stress tests of
the strength of major banks understated some lenders’ holdings
of potentially risky government debt.

By 0849 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index of top shares was down 0.4 percent at 1,061.27 points.

“There still is some doubt about economic growth in the
second half,” said Koen De Leus, economist at KBC Securities.
“We have just had a relief rally and investors are waiting to
see what direction the economy is going to take in the second

British bank Barclays (BARC.L: ) fell 3.2 percent. The bank
said Bob Diamond, head of its investment and wealth management
business Barclays Capital, would succeed John Varley as group
chief executive next year.

“There is uncertainty triggered by the shake-up at Barclays,
rumours of capital increases and uncertainty ahead of Basel
III,” Frank Schneider, trader at Alpha Trading in Frankfurt,


Mining shares slipped after Australian Prime Minister Julia
Gillard secured a second term in office. Her government is
vowing to press ahead with a new mining tax. [ID:nSGE6850I3]

BHP Billiton (BLT.L: ) and Rio Tinto (RIO.L: ), which are also
listed in Australia, fell 0.9 percent and 1.4 percent
respectively. Anglo American (AAL.L: ), Antofagasta (ANTO.L: ),
Eurasian Natural Resources Corporation (ENRC.L: ) and Xstrata
(XTA.L: ) were down 0.9-2.3 percent.

On the upside, Invensys (ISYS.L: ), tipped to fall out of the
FTSE 100 index in this week’s reshuffle, added 2.9 percent, with
traders citing a report the company was a takeover target.

Tullow Oil (TLW.L: ) rose 2.2 percent after traders cited
speculation in the press of bid rumours from ExxonMobil (XOM.N: )
and China Offshore Oil Corporation.

Meanwhile, the technical picture looked bearish. The Euro
STOXX 50 (.STOXX50E: ), the euro zone’s blue-chip index, fell 0.9
percent to 2,729.83 points, slipping below the 50 percent
Fibonacci retracement of a fall to a low in May from a high in
April, seen as a negative sign.

Across Europe, the FTSE 100 (.FTSE: ) index was down 0.8
percent, Germany’s DAX (.GDAXI: ) was 0.8 percent lower and
France’s CAC 40 (.FCHI: ) was down 1.1 percent.

The Thomson Reuters Peripheral Eurozone Countries Index
(.TRXFLDPIPU: ) fell 2 percent.
(Reporting by Joanne Frearson; Editing by Dan Lalor)

RPT-European shares slip on banking worries