European shares edge off highs, led down by banks

LONDON Mon May 13, 2013 11:34am EDT

LONDON May 13 (Reuters) - European shares edged off five-year highs on Monday, with renewed concerns about ongoing problems facing banks sparking a wave of profit taking in the second best performing sector of the past month.

An upcoming rights issues at Germany's Commerzbank , which is expected to be at a steep discount, and bearish comments about Standard Chartered from influential short-selling firm Muddy Waters pushed the STOXX Europe 600 Banking sector 1.3 percent lower.

However, losses in the broader market were limited, with investors seeking to take profits on the recent gains partly offset by those looking for buying opportunities on any dips.

The FTSEurofirst 300 index closed 0.3 percent lower at 1,230.12 points, not far off a 5-year high of 1,238.25 points hit on Friday.

"They've had a strong few weeks but if you look at Europe relative to the other major equity markets, like U.S. and Japan, they remain the laggards, so I don't think there is too much exuberance built into the markets," said James Buckley, head of European equities at Baring Asset Management.