European stocks close lower on banks, telecoms

European shares fell yesterday, ending a two-day winning streak, as losses by bank stocks, including BNP Paribas, and telecom companies outweighed gains for carmaker DaimlerChrysler and drinks group Diageo.

The FTSEurofirst 300 index of top European shares closed 0.13 per cent lower at 1,545.98 points, having set a new six-year intra-day high of 1,550.19 earlier in the session.

Leading US stock market indexes were slightly higher as the European trading day ended.

BNP Paribas, the eurozone's second-biggest bank by market capitalisation, reported net profit above market expectations but its shares fell 3.8 per cent on worries over its French retail banking business.

"The negative trend from the previous quarter continued in Q4," said Sabine Bohn, analyst at Germany's DZ Bank.

"At operating level the earnings were disappointing... (we) see short-term pressure on the share price due to the weak operating development," she said in a note.

France's Societe Generale fell 1.7 per cent and Swiss bank UBS dropped 1.3 per cent, both extending losses after their quarterly reports on Wednesday and Tuesday respectively.

But Credit Suisse, another Swiss bank, saw its shares rise 3.5 per cent after reporting a forecast-beating fourth-quarter net profit and appointing investment banking head Brady Dougan as new chief executive officer.