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European stocks fall on renewed credit jitters

PARIS - European equities fell in early trade on Wednesday, losing ground for the second day in a row as banking shares tracked declines suffered by their US peers overnight on rekindled worries over credit losses.

At 0710 GMT, the FTSEurofirst 300 index of top European shares was down 0.7 percent at 1,200.57 points. The index lost 0.3 percent on Tuesday.

Royal Bank of Scotland dropped 3.8 percent, Banco Santander fell 1.3 percent and Credit Suisse shed 2.2 percent.

‘Credit fears are rising again after the news from JPMorgan. It started yesterday in Europe, and with the fall on Wall Street overnight, that will weigh today,’ said Benoit De Broissia, analyst at Richelieu Finance, in Paris.

US banking shares tumbled overnight on news that JPMorgan Chase has racked up $1.5 billion of losses so far this quarter on mortgage-linked assets, sending its stock down more than 9 percent.

Goldman Sachs also weighed after a number of analysts cut their earnings estimates for the investment bank, sending its stock down 6 percent.

Dutch financial group ING fell 1.3 percent despite posting a quarterly net profit that beat estimates.

On the upside, mining stocks rose along with metal prices, recovering from recent hefty losses. Rio Tinto gained 2.1 percent, Xstrata added 2.2 percent and BHP Billiton gained 1.8 percent.

Oil prices took a breather, trading around $113.50 a barrel, after a recent sharp drop.