By Harpreet Bhal
LONDON, Sept 28 (Reuters) - European shares fell on Tuesday as worries persisted over the debt situation in peripheral euro zone countries, and with some nervousness lingering ahead of data which is likely to reflect the pace of economic recovery.
Standard & Poor's warned it may cut Ireland's credit rating again due to the rising cost of recapitalising nationalised Anglo Irish Bank, sparking jitters in the equity market and pushing Dublin's borrowing costs to fresh peaks.
By 0839 GMT, the pan-European FTSEurofirst 300 index of top shares shed 0.9 percent at 1,064.43 points, adding to falls from the previous session.
Investors are likely to await a slew of economic data from the United States to gauge the pace of economic recovery. Key data include consumer confidence figures for September at 1400 GMT and the Standard & Poor's/Case-Shiller home price index at 1300 GMT.
'Markets look a bit tired and are looking to economic data to help them break higher. There are tentative signs that the rate of slowing in the global economy is running its course but markets are still nervous about that,' said Bernard McAlinden investment strategist at NCB Stockbrokers in Dublin.
'In Europe you have got worries about the banking system in the peripheral euro zone economies flaring up again and in general there are worries about the strength of the global economy.'
Adding to those jitters, the Spanish/German bond yield spread hit its widest since mid-July as investors worried about the country's credit ratings outlook. Spanish stocks shed 1.4 percent.
Spain could lose its final triple-A rating on its debt by Moody's this week, but the move is seen as catching-up with cuts to Spain's top rating by peers Standard & Poor's and Fitch last spring.
'Although Spain seems to no longer be in the bad boys club of the euro zone, the knock-on effect is inevitable,' a Madrid-based trader said.
BANKS PRESSURED
Banking stocks were among the heaviest sector drags on worries over peripheral euro zone debt, with Barclays, Societe Generale and Deutsche Bank down 1.8 to 2.2 percent.
Among the biggest individual fallers, Michelin shed 8.2 percent -- its sharpest sell-off in 19 months -- after the tyre maker announced a deeply discounted rights issue of about 1.2 billion euros to boost investments and enhance its credit rating.
Other fallers included Man Group, which slipped 3.2 percent. The firm said clients pulled out assets for an eighth straight quarter.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 shed 1 to 1.1 percent.
The Euro STOXX 50, the euro zone's blue-chip index, fell 1.1 percent to 2,746.92 points, holding above the 50 percent Fibonacci retracement of the index's fall from an April high to a May low at 2,736.28 points.
(Additional reporting by Tomas Gonzalez in Madrid; Graphic by Scott Barber; Editing by Hans Peters) Keywords: MARKETS EUROPE STOCKS (harpreet.bhal@thomsonreuters.com; +44 207 542 4533; Reuters Messaging: harpreet.bhal.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, Sept 28 (Reuters) - European shares fell on Tuesday as worries persisted over the debt situation in peripheral euro zone countries, and with some nervousness lingering ahead of data which is likely to reflect the pace of economic recovery.
Standard & Poor's warned it may cut Ireland's credit rating again due to the rising cost of recapitalising nationalised Anglo Irish Bank, sparking jitters in the equity market and pushing Dublin's borrowing costs to fresh peaks.
By 0839 GMT, the pan-European FTSEurofirst 300 index of top shares shed 0.9 percent at 1,064.43 points, adding to falls from the previous session.
Investors are likely to await a slew of economic data from the United States to gauge the pace of economic recovery. Key data include consumer confidence figures for September at 1400 GMT and the Standard & Poor's/Case-Shiller home price index at 1300 GMT.
'Markets look a bit tired and are looking to economic data to help them break higher. There are tentative signs that the rate of slowing in the global economy is running its course but markets are still nervous about that,' said Bernard McAlinden investment strategist at NCB Stockbrokers in Dublin.
'In Europe you have got worries about the banking system in the peripheral euro zone economies flaring up again and in general there are worries about the strength of the global economy.'
Adding to those jitters, the Spanish/German bond yield spread hit its widest since mid-July as investors worried about the country's credit ratings outlook. Spanish stocks shed 1.4 percent.
Spain could lose its final triple-A rating on its debt by Moody's this week, but the move is seen as catching-up with cuts to Spain's top rating by peers Standard & Poor's and Fitch last spring.
'Although Spain seems to no longer be in the bad boys club of the euro zone, the knock-on effect is inevitable,' a Madrid-based trader said.
BANKS PRESSURED
Banking stocks were among the heaviest sector drags on worries over peripheral euro zone debt, with Barclays, Societe Generale and Deutsche Bank down 1.8 to 2.2 percent.
Among the biggest individual fallers, Michelin shed 8.2 percent -- its sharpest sell-off in 19 months -- after the tyre maker announced a deeply discounted rights issue of about 1.2 billion euros to boost investments and enhance its credit rating.
Other fallers included Man Group, which slipped 3.2 percent. The firm said clients pulled out assets for an eighth straight quarter.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 shed 1 to 1.1 percent.
The Euro STOXX 50, the euro zone's blue-chip index, fell 1.1 percent to 2,746.92 points, holding above the 50 percent Fibonacci retracement of the index's fall from an April high to a May low at 2,736.28 points.
(Additional reporting by Tomas Gonzalez in Madrid; Graphic by Scott Barber; Editing by Hans Peters) Keywords: MARKETS EUROPE STOCKS (harpreet.bhal@thomsonreuters.com; +44 207 542 4533; Reuters Messaging: harpreet.bhal.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.