European shares closed lower yesterday as oil prices climbed again and British retailer Boots slipped after saying first-half trading conditions were difficult.
French food group Danone also fell two per cent on a report citing an analyst note which said the company might buy smaller Dutch rival Numico to bar a rumoured bid from PepsiCo. Danone and Numico denied any talks.
The pan-European FTSEurofirst 300 index unofficially closed 0.35 per cent weaker at 1,224.9 points, easing from a new 40-month high of 1,230.9 struck in early trade.
Shares in health and beauty shop Boots shed three per cent after saying it saw no sign of improvement in the British retail sector, which has struggled recently as consumers battle higher fuel bills and a slowdown in the housing market.
Britain's Confederation of British Industry (CBI) said on Wednesday that retail sales volumes fell at their fastest pace in 22 years in September.
"It's a poor (Boots) statement. The bulls will cling to the hope of a bid, but will anyone commit significant funds to buy a retailer until one thinks that the market has bottomed?" said Richard Ratner, head of equities at Seymour Pierce.
Boots dragged fellow UK retailer Kingfisher down 2.5 per cent.
Oil moved above $66.50 a barrel, stoked by worries that hurricane-wrecked US refineries would be unable to churn out ample heating fuel ahead of this winter.
The latest spike in oil added to concern that inflationary pressures will force the Federal Reserve to continue raising interest rates despite signs of slowing economic growth.
Oil major BP added 0.7 per cent while Royal/Dutch Shell and Total also firmed.
Oil creeping back up sent New York's Dow Jones industrial average 0.4 per cent lower, which helped keep European bourses under pressure late on.
Around Europe, London's FTSE 100 index was 0.3 per cent weaker, Paris's CAC-40 fell 0.45 per cent and Zurich's SMI lost 0.6 per cent.
Frankfurt's 30-share DAX shed 0.55 per cent, paring Wednesday's 1.7 per cent rally when it closed at a three-year high boosted by news of job cuts at DaimlerChrysler.
The carmaker gave up some of those gains, slipping 2.5 per cent, while Volkswagen was also weaker despite Porsche saying it wants to buy more shares in its German rival quickly.
Porsche said on Wednesday it had bought a 10.26 per cent voting stake in VW in its effort to become the largest shareholder, with a holding of about 20 per cent, in order to prevent any takeover.
London-listed miners such as Xstrata dipped after strong runs and as copper prices fell back from record highs.
Online casino PartyGaming led Europe's fallers, slipping eight per cent after peer 888.com had a disappointing London IPO debut and on renewed rumours PartyGaming might bid for UK rival Betfair.
"It is because 888 went public today and that has been a bloodbath," said a dealer.
However, British hotels and gaming company Hilton Group rose 2.4 per cent after upbeat meetings between company executives and investors, dealers said.