Insurers and heavily-weighed oil shares such as Total led European stock markets down yesterday as earnings angst pushed more investors to lock in profits on equity markets after the recent rally.

Germany's Munich Re led volatile insurance shares down, shedding 3.5 per cent after Allianz AG said it would cut its stake in the reinsurer earlier than planned by three per centage points to 16-18 per cent as part of a scheme announced in March.

France's Total fell two per cent after chief executive Thierry Desmarest said in a newspaper interview the oil major's second-quarter earnings would be lower than those of the first quarter amid poor petrochemical margins and a weaker dollar.

This reignited fears that unfavourable currency effects and still sluggish economic conditions may have impacted European earnings more brutally than investors had expected and could lead to sharper market corrections.

By 1545 GMT, with Frankfurt still officially trading, the pan-European FTSE Eurotop 300 index was down 1.04 per cent at 854 points, while the narrower DJ Euro Stoxx 50 index lost 1.33 per cent to 2,441.

"There will be good and bad results as the impact of the weak dollar has been priced in in some stocks but not in others," said Adrian Darley, senior investment manager at Gartmore Investment Management.

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