Europe: Shares fall back, banks and commodity stocks underperform

[LONDON] European shares fell on Wednesday, tracking similar declines in other global markets due to persistent concerns over China's economy, with bank and mining stocks underperforming.

The pan-European FTSEurofirst 300 index, which had risen 4.3 per cent on Tuesday, fell 2.6 per cent while the eurozone's blue-chip Euro STOXX 50 index fell by a similar amount.

The FTSEurofirst had suffered its worst one-day loss since November 2008 on Monday, but then rallied back on Tuesday after a Chinese rate cut briefly halted a stock market slump in the country.

However, investors said they remained worried by signs of a Chinese economic slowdown and by deflationary pressures resulting from Beijing's devaluation of its currency earlier in August.

"I think the downtrend is still intact because of the bigger picture of anaemic global economic growth. Any reasonable rally on the markets will be sold into," said Berkeley Futures'associate director Richard Griffiths.

REUTERS