RTRS: Europe shares hit 2-month lows as banks, oils weigh
European shares slipped for the third straight session on Wednesday to a two-month low as a fresh wave of fear hit the financial sector following steep losses at some banks, sending Belgian bank KBC (KBC.BR) down 30 percent.
European governments provided further support to struggling banks but failed to reverse mounting gloom, with a UK politician calling for nationalisation of two top lenders. British bank Barclays (BARC.L) shed 21 percent, while Lloyds Banking Group (LLOY.L) slipped 14 percent.
The FTSEurofirst 300 .FTEU3 index of top European shares, which fell for the tenth time in the past 11 sessions, was down 1.5 percent at 763.08 points at 1208 GMT after falling as low as 755.35. A drop below 750.48 points will be the lowest level for the index in nearly six years.
The pan-European index is down 8 percent so far this year after plunging 45 percent last year, hurt by a financial crisis that began with U.S. mortgage defaults in 2007 and now threatens much of the world with deep and vicious recession.
Banks have been hit hard, with the European sector index .SX7P touching a 16-year low on Wednesday.
"We are certain that there is no way we are going to get a quick bounce back," said Valerie Plagnol, chief strategist at CM-CIC Securities, referring to European equities.
"This is a long, difficult cycle, but government interventions have never been that big, that fast to respond to the challenges. It may prove to be something that works, but it will take time," she said.
Belgium was planning a second round of help for banks, France and Germany also offered more support, while Britain threw its banks a second multi-billion pound lifeline on Monday.
But banks were the second-biggest losers on the European index, with Barclays and Lloyds Banking Group tanking about 70 percent each in the past 10 days. Concern mounted that they and Royal Bank of Scotland (RBS.L) could need more state help or be fully nationalised.
RBS gained 6.8 percent on Wednesday after plunging 64 percent on Monday when it said it was on course to report a 2008 loss of up to 28 billion pounds ($41 billion), the biggest loss in British corporate history.
Among other banks, BNP Paribas (BNPP.PA) fell 5.7 percent, Commerzbank (CBKG.DE) was down 5 percent and UBS (UBSN.VX) dropped 1.1 percent. But Natixis (CNAT.PA) rose 6.8 percent and Societe Generale (SOGN.PA) gained 5.3 percent.
