German shares lead Europe lower as concerns over Ukraine mount

EDINBURGH Wed Aug 6, 2014 3:11am EDT

EDINBURGH Aug 6 (Reuters) - European shares fell in early deals on Wednesday, with appetite for equities knocked back by a resurgence in geopolitical tension over Ukraine and some weaker than expected earnings reports.

The pan-European FTSEurofirst 300 was down 0.8 percent at 1,324.53 by 0704 GMT, with the German DAX, whose firms are heavily dependent on Russian energy, down 1.1 percent.

Equities fell after reports that Russian troops were massing at the eastern Ukrainian border, where pro-Moscow rebels are in conflict with the Ukrainian government - ratcheting up geopolitical tension in the region.

Russian President Vladimir Putin also ordered his government to prepare retaliatory measures against the latest round of Western sanctions, Russian news agencies reported on Tuesday.

"President Putin reportedly ordered his government to investigate retaliatory sanctions against the EU and U.S," Stan Shamu, market strategist at IG, said in a trading note.

"There is also renewed build-up of Russian troops at the Ukraine border resulting in fears of Russia invading Ukraine."

The top faller on the FTSEurofirst 300 in early deals was Hannover Re, down 3.6 percent after the German reinsurer said its net profit rose 10 percent to 211.5 million euros (283 million US dollar) in the second quarter, slightly less than expected, as premiums declined. (Reporting by Alistair Smout; Editing by Sudip Kar-Gupta)

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