Euro shares head down again over bank fears
European shares sold off again today with banks and commodity stocks - two of the sectors most exposed to broader economic fortunes - the top fallers on concerns about stimulus unwinding and Greek political turbulence.
By 0735 GMT, the FTSEurofirst 300 was down 13.86 points, or 1.2pc at 1,160.93, testing key support levels and led by miners down 1.4pc and banks down 1.6pc.
UK-lender Royal Bank of Scotland fell 7.1pc after the bank surprised investors late last night by announcing Chief Executive Stephen Hester was stepping down.
"This announcement increases the uncertainty around the shares and potentially delays further any return of the bank to private ownership," Gary Greenwood, analyst at Shore Capital, says while cutting his rating on RBS to "sell" from "hold".
The broader index has fallen nearly 8pc since mid-May and was just 13 points off retracing the gains enjoyed since mid-April, in a sign of how reliant and sensitive markets have become to monetary policy.
Worries over political stability in Greece, as workers began a nationwide strike in protest against the "sudden death" of state broadcaster ERT, did little to settle investors nerves and raised concerns over the outlook the euro zone.
Peel Hunt's equity strategist Ian Williams, however, said the concerns over when stimulus withdrawal will occur in the United States remained the key focus for investors.
"Low volumes and high volatility will remain the order of the day at least until next week's FOMC (Federal Open Market Committee) meeting, with technical considerations set to dominate," he said.
The FTSEurofirst 300 has crashed through the 61.8pc Fibonacci retracement of the rally that began in mid-April and topped out in mid-May, with the next level of support being the 200-day moving average around 1,155, which it bounced off of early in the session.
Insurers suffered too, down 1.8pc, with their exposure to the rising bond yield which should occur when the Fed does temper its asset purchasing scheme, hampering their near-term outlook. Aberdeen Asset Management shed 4pc.
With the index engulfed in a sea of red, defensive sectors, those areas of the market which tend to perform better in austere periods such as healthcare and food and beverage , were the most notable outperformers, although still down on the day.