LONDON (MarketWatch) -- European shares fell on Wednesday morning, as initial gains made after a steep rate cut from the U.S. Federal Reserve quickly faded, with BNP Paribas shares dropping sharply.
The pan-European Dow Jones Stoxx 600 index fell 0.2% to 198.63, after trading as high as 200.79 early in the session.
Of notable decliners, shares of BNP Paribas fell 12.7% after the group said late Tuesday that its corporate and investment banking arm registered a 710 million euro pretax loss in the first 11 months of the year.
The group said it was considering cutting worldwide staffing levels in the division by around 5% and will take other measures including reducing market risk and bond inventories.
BNP Paribas said the group as a whole was "largely profitable" over the 11-month period.
Other banks trading lower included HSBC Holdings , down 4.1%, and Deutsche Bank , down 6.6%.
Early gains came after the Federal Reserve pulled out all the stops in its campaign to save the U.S. economy Tuesday, slashing interest rates to just above zero and promising to try an array of new economic measures to stimulate spending.
The central bank's Federal Open Market Committee established a target range for the federal funds rate of zero to 0.25%, effectively cutting its key rate for overnight lending to banks by between 0.75% and 1%. Read more on Fed.
U.S. stocks soared higher Tuesday, with banks fronting the surge, after the Federal Reserve move. See Tuesday's U.S. Market Snapshot.
There were a few advancers in the financial sector in Europe, with Swiss banks UBS and Credit Suisse , up more than 4% each and Spanish lender Santander up 1.8%.
Fortis shares rose 7% in Brussels as trading started for the first time this week. On Monday, a court of appeal move in Brussels threw the Belgium government's plan to save Fortis from bankruptcy into doubt and the shares were suspended.
On a national level, the U.K. FTSE 100 index rose 0.1% to 4,313.50, the German DAX 30 index climbed 0.3% to 4,745.44 and the French CAC-40 index advanced 0.3% to 3,259.79.
Stock futures were pointing to a lower start on Wall Street on Wednesday, with Dow Jones Industrial Average futures down 124.
Elsewhere in Europe, copper producer Norddeutsche Affinerie fell 3.5%. The firm said it expects earnings to weaken in the first quarter of its fiscal year.
Full-year net profit rose to 237 million euros, up roughly 50% from the same point a year ago and beating analyst forecasts for a profit of 203.2 million euros.
