European shares edge down as Greece concerns weigh

European stocks edged down yesterday, pressured by weaker banks, as worries over Greece's fiscal problems resurfaced, while a downward revision to euro zone growth highlighted the fragility of an economic recovery.

Losses, however, were kept in check by gains in defensive drugmakers with GlaxoSmithKline, AstraZeneca, Sanofi-Aventis up 0.6 to 0.9 per cent.

By 1121 GMT, the pan-European FTSEurofirst 300 index of top shares shed 0.2 per cent at 1,099.48 points, after hitting an 18-month closing high for a second session in a row on Tuesday.

Equities were pressured by falls in the euro, which has been weak following a media report Greece wanted to renegotiate a joint EU-International Monetary Fund aid deal reached last month. Greece denied the report.

Banking shares were among the biggest drag on the index, with Barclays, Société Générale, BNP Paribas and Deutsche Bank off 0.3 to 1.7 per cent.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 were all down around 0.1 per cent. Greek banks lost 2.7 per cent. The country's finance minister said Greek banks have asked for permission to access the remaining funds from a state support package first agreed in 2008.

Some individual stocks helped limit losses on the index. Hedge fund firm Man Group soared 6.6 per cent, reaching a more than two-month high after its main fund AHL posted a 3.8 per cent rise in net asset value last week.

Danish wind turbine manufacturer Vestas added 7.4 per cent after the firm said it won an order for turbines with a total capacity of 93 megawatts from Turkey's Agaoglu Group.

Analysts said that equity markets could push higher following multi-month highs hit in recent weeks, as investors await the next round of corporate earnings and further macroeconomic data for direction.

"Sentiment for stock markets is clearly still very positive. The 6,000 level looks like the next obvious target for the FTSE 100 and for the DAX there is maybe scope for another 400 points or so to come from this rally," said David Jones, chief market strategist at IG Index.

"Even though concerns like Greece may put a bit of short term pressure on markets, investors still seem happy to step in and buy whenever we see any short-term weakness," he said.

Among individual movers, Renault shed one per cent, while Daimler edged down 0.1 per cent after the two carmakers and Renault's partner Nissan Motor unveiled a partnership deal to swap stakes and jointly develop cars.