Renewed concern over Greece and weak figures from leading companies such as Siemens and Philips halted a winning run on European stock markets on Tuesday.
The pan-European FTSEurofirst 300 index, which had risen for the last eight sessions, slipped back by 0.4 per cent to 1,482.44 points in early trading.
The euro zone’s blue-chip Euro STOXX 50 index also declined 0.6 per cent, retreating after a similar eight-day winning streak. Those gains were ignited by the European Central Bank’s plans to buy back government bonds to spur growth in the struggling euro zone economy.
Greek shares underperformed for the second day in a row. The benchmark Athens ATG equity index fell 3.6 per cent and Greece’s borrowing costs rose.
Investors were worried Greece’s new anti-bailout government would clash with their European Union partners. Syriza, the party that won Greece’s election on Sunday, opposes the terms of the Greek bailout imposed by the ECB, the EU and the International Monetary Fund.
Greek banks slid to a record low, with National Bank of Greece slumping over 10 per cent. The STOXX Europe 600 Banking Index fell 1.4 per cent.
“I'm staying away from the financials and the banks at the moment, because they’re in the firing line from any fallout from Greece,’’ said Mirabaud Securities’ European equity sales executive Rupert Baker.
Some weak updates from leading companies also weighed on European equities.
Siemens’ shares fell 3.2 per cent after the German company said quarterly profit from its industrial units fell 4 per cent.
Dutch healthcare and lighting company Philips slid 4.6 per cent after Philips cut its 2016 sales and earnings estimates.
“Today’s earnings show that global demand remains the big issue,’’ said Hampstead Capital LLP hedge fund manager Lex van Dam. “Companies can take advantage of low rates, they can buy back stock, but they cannot create demand.’’
However, the Swiss stock market managed to outperform.
Zurich’s SMI equity index rose 1 percent after the Swiss franc sank below levels last seen when authorities removed a cap on the franc’s value against the euro earlier this month. Traders speculated the Swiss National Bank was intervening on Tuesday to weaken the currency.