Europe shares close lower; banks led down by HSBC
LONDON, Jan 14 (Reuters) - European shares closed lower on Wednesday, falling for the sixth consecutive session, with banks led lower by HSBC (HSBA.L) on worries it will need to raise money to boost its balance sheet.
The FTSEurofirst 300 .FTEU3 index of top European shares fell 4.3 percent to close provisionally at 804.27 points, its lowest in three weeks.
HSBC (HSBA.L) tumbled 9.8 percent after Morgan Stanley analysts said the bank is likely to halve its dividend and may need to raise up to $30 billion in a rights issue.
"It's a combination of many things coming at once," said Gareth Williams, European equity strategist at ING. "There's the banking sector, U.S. retail sales, the bankruptcy at Nortel. Arguably, all this should be in the price, but coming together it's raising concerns about the scale of the bad news in the next quarter."
There was more evidence on Wednesday of worldwide economic weakness. The German economy contracted sharply in the final quarter of 2008, and euro zone industrial output plunged in November, boosting expectations the European Central Bank will make a deep cut to interest rates on Thursday. [ID:nLE319511]
In the United States, retail sales 2.7 percent in December.
Royal Bank of Scotland (RBS.L) fell 17 percent. Other banks to fall included BNP Paribas (BNPP.PA), Banco Santander (SAN.MC) and Credit Suisse (CSGN.VX), all down between 6.9 and 8.6 percent.
Britain's Barclays (BARC.L) said it is cutting more UK-based jobs in its retail and commercial banking business, which a person familiar with the matter said is likely to mean a further 2,100 jobs will go. Its shares fell 14.4 percent.
Around Europe, the UK's FTSE 100 index .FTSE was down 5.1 percent, Germany's DAX index .GDAXI fell 4.6 percent and France's CAC 40 .FCHI lost 4.6 percent. (Reporting by Brian Gorman)
