Europe stocks slip

European stocks slipped yesterday as investors remained jittery about the financial sector after Lehman Brothers posted a quarterly loss and announced steps to restructure the company.

At 1224 GMT, the FTSEurofirst 300 index of top European shares was down one per cent at 1,143.95 points. The index has lost about 24 per cent so far this year. Lehman said it planned to sell a majority stake in its investment management division and spin off commercial real estate assets as the struggling US investment bank fought to raise capital.

"It would have been more significant to see fresh capital rather than sell off assets. Although there is no bad news, it does not get Lehman out of the woods and the banking sector is likely to be disappointed," said Bernard McAlinden, market strategist at NCB Stockbrokers in Ireland.

The fourth-largest US investment bank said it has reduced exposure to toxic assets, including cutting its residential mortgage exposure by nearly half, and cut its dividend.

Lehman, a casualty of the US subprime mortgage crisis, brought forward the release of the initiatives and its results by a week after its shares sank as much as 46 per cent on Tuesday on growing concern over its ability to raise capital.