European equities ended lower yesterday, with banks and autos leading the fall, as investors scaled back their trading positions after heavy losses in Asia and on concerns about the pace of the global economic recovery.

The FTSEurofirst 300 index of top European shares closed 0.3 per cent lower at 931.98 points after trading in a range of 920.28-934.68.But the index is still up 44 per cent since a record low in March and has gained 12 per cent this year.

"We are expected to experience a short period of consolidation after such a significant surge in the market - an increase of about 20 per cent in equity markets in three to four weeks," said Romain Boscher, head of equity management at Groupama Asset Management.

"We are convinced that in September, people will reallocate money in favour of risky assets."

Financial stocks were among top decliners, with Standard Chartered, HSBC, Barclays, Royal Bank of Scotland, BNP Paribas and Société Générale down 0.5 to 2.2 per cent.

Across Europe, Britain's FTSE 100 index rose 0.1 per cent, Germany's DAX fell 0.4 per cent and France's CAC 40 ended flat.

A survey by accountants KPMG found that Britain's banks are likely to see their battered retail arms slide to a loss in the second half of 2009, as the cost of bad loans, tough competition and wholesale funding continues to weigh.