* FTSEurofirst 300 index down 1.6 pct
* Banking shares under pressure
* Commodity stocks weigh as prices retreat
By Joanne Frearson
LONDON, Dec 8 (Reuters) - European shares closed lower on
Tuesday, with some banks down on worries over their exposure to
Dubai World and Greek banks hit by a Fitch Ratings downgrade on
Greece's credit rating.
The pan-European FTSEurofirst 300 <> index of top
shares closed down 1.6 percent at 1,004.41 points and hit a
one-week low of 999.71.
The index is up 56 percent since reaching a record low in
early March and is up about 21 percent for the year.
"Investors have been reminded there are many issues out
there - the Dubai World and the Greek downgrades - it suggests
there are still many potential nasties out there," said Peter
Dixon, economist at Commerzbank.
"The old buyer beware phrase is very much at the forefront
of our minds at the moment ... Though my initial reaction is the
Greek development has given the market a bit of a shove down."
Banks took the most points off the index. Fitch Ratings cut
Greece's debt to BBB+ with a negative outlook, the first time in
10 years a major ratings agency has put Greece below an A grade.
[]
National Bank of Greece <NBGr.AT> and EFG Eurobank <EFGr.AT>
were 10 and 6.5 percent lower.
The sector was also hit after traders cited a report about
the size of losses facing Nakheel, a unit of Dubai World. HSBC
<HSBA.L>, Barclays <BARC.L>, Banco Santander <SAN.MC> and BNP
Paribas <BNPP.PA> were down 1.6 to 3.2 percent.
COMMODITIES FALL
Energy stocks slipped as crude <CLc1> fell 1.5 percent. BG
Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L> and Total
<TOTF.PA> were down 1.1 to 2 percent.
Miners were under pressure as metal prices retreated. Anglo
American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton <BLT.L>,
Eurasian Natural Resources Corporation <ENRC.L>, Rio Tinto
<RIO.L> and Xstrata <XTA.L> were 1.7 to 3.5 percent lower.
Tesco <TSCO.L> fell 2.3 percent after it posted quarterly
sales growth towards the bottom end of forecasts, held back by a
drop in food price inflation, but said a gradual consumer
recovery remained on track. []
Also weighing on investor sentiment was news that German
industrial output unexpectedly fell in October, pointing to a
slowdown in the economy's recovery in the final quarter of this
year. []
"It's the weak German industrial output numbers and a report
about big losses at Nakheel. Anything Dubai-related has a big
impact on the banks and, with trading thin, everything gets
exaggerated," a trader said.
On the upside, Dutch mail company TNT <TNT.AS> gained 2.9
percent, after a report two activist funds have built up stakes
in a bid to shake up its structure. []
Shares in British media group Pearson <PSON.L> rose 1.1
percent after U.S. peer McGraw-Hill <MHP.N> said it expected a
better year for all its businesses in 2010.
Across Europe, the FTSE 100 <> index was down 1.7
percent, Germany's DAX <> was 1.7 percent lower and
France's CAC 40 <> was down 1.4 percent.
(Additional reporting Jon Hopkins; Editing by Greg Mahlich)
