Banks drag on European indexes

European shares fell yesterday as banks once again bore the brunt of investor fears over the impact of the credit crunch, yet losses were limited by a bounce in techs and perceived safe-havens such as food stocks.

Shares in HSBC were the largest negative weight on the broader market after Goldman Sachs analysts cut their rating on the bank.

The FTSEurofirst 300 index of top European shares ended down 0.58 per cent at 1,467.58 points, having touched an intraday high at 1,491.99 points.

The index has surrendered all its gains for the year and is on track for an eight per cent fall this month, which would make it the largest monthly slide since December 2002.

"Sentiment is clearly very fragile still in the market," said Darren Winder, head of macro and strategy research at Cazenove.

"Clearly people continue to be focused very much on the financial sector, waiting to see if there are any more difficulties," he said.