European shares dropped in early trade on Tuesday, tracking losses on Wall Street and in Asia, as fear of a widespread recession eclipsed optimism over China’s $600 billion stimulus package.
At 0815 GMT the FTSEurofirst 300 index of top European shares was down 1.5% at 908.48 points. The index rose 0.9% in the previous session, as news of China’s stimulus plan sparked a rally in commodity-related shares. But commodity stocks pulled back on Tuesday as fears for the global economy returned to the fore and metals and oil prices retreated.
BG Group, BP, Total and Eni were down 1.9-3.9%. Miners fell, with Anglo American, BHP Billiton, Rio Tinto and Xstrata 3.9-5.9% lower. Data showed on Tuesday that China’s inflation fell to a 17-month low of 4% in October, while trade figures were expected to show slowing imports, dampening hopes that China’s growth will help cushion the impact of a global downturn.
Adding to the gloom in Europe, data showed British retail sales fell for a fifth straight month in October on a like-for-like basis, and by the biggest amount in more than three years. Banks took the most points off the index. Deutsche Bank slid 5%, Banco Santander fell 4.3% and Credit Agricole was down 2%. Across Europe, the FTSE 100 index was down 1.5%, Germany’s DAX was 2.2% lower and France’s CAC 40 was down 2%. (Reuters)