(Corrects spelling of "banks" in headline")
* FTSEurofirst 300 falls 0.4 percent
* Banks take most points off index; Greek banks slide
* For up-to-the-minute stocks news, click on [STXNEWS/EU]
By Brian Gorman
LONDON, Dec 17 European shares fell back from a
one-month closing high in early trade on Thursday after the U.S.
Federal Reserve reiterated its special liquidity measures would
expire early next year.
At 0940 GMT, the FTSEurofirst 300 .FTEU3 index of top
European shares was down 0.4 percent at 1,027.34 points, having
hit a one-month closing high on Wednesday.
The European benchmark is still up more than 59 percent from
its lifetime low on March 9, with several major economies having
emerged from recession.
The heavyweight banking sector took the most points off the
index. BBVA (BBVA.MC), BNP Paribas (BNPP.PA), Banco Santander
(SAN.MC), Barclays (BARC.L), HSBC (HSBA.L), Lloyds Banking
(LLOY.L) and Societe Generale (SOGN.PA) fell between 0.6 and 2.3
Greek banks were among the worst performers due to ongoing
worries about the country's deficit. Alpha Bank (ACBr.AT),
Piraeus Bank BCPr.AT, National Bank of Greece (NBGr.AT) and
EFG Eurobank EFGr.AT fell between 3.7 and 4.2 percent.
Few other sectors were having a major impact on the index.
Some energy companies were lower as crude prices CLc1 hovered
just above $72 a barrel. Total (TOTF.PA) and BG BG.L were down
0.7 and 1.2 percent, respectively.
The dollar surged to three-month highs on Thursday, knocking
down a succession of barriers, as investors wound up short
positions for the year after a more upbeat tone from the Federal
Reserve helped support its recent rebound. [ID:nTOE5BG05F]
FED STICKS TO PLAN
U.S. markets gave up their earlier gains and closed little
changed on Wednesday. The Fed voiced growing optimism on the
economy as job losses slow, but repeated a vow to keep interest
rates unusually low for "an extended period".
Underscoring improving conditions for banks, the Fed said it
would stand by plans to shutter most of its emergency lending
facilities on Feb. 1, showing growing confidence that credit
markets could stand on their own. [ID:nN16119711]
Later, investors will turn their attention to the weekly
jobless claims data in the United States, due at 1330 GMT, and
the leading indicators index, at 1500 GMT.
"Markets are still trying to find a trend and establish
whether the improvement in the economy is due to stimulus
packages," said Justin Urquhart Stewart, investment director at
Seven Investment Management.
Among individual shares, pharmaceutical group Shire (SHP.L)
fell 1.7 percent after UBS cut its rating to "neutral" from
Urquhart Stewart pointed to a fall in Hong Kong as another
possible reason for a weaker European market.
"There's some nervousness from the east this morning, with
Hong Kong weaker with the number of IPOs," he said.
The Hang Seng .HSI index of Hong Kong shares was down 1.2
Across Europe, Britain's FTSE 100 .FTSE, France's CAC40
.FCHI and Germany's DAX .GDAXI were down between 0.3 and 0.4
(Editing by Karen Foster)