London: European stocks fell in early trade on Monday, dragged by oils which plunged on lower crude prices and by cautious sentiments ahead of the US economic stimulus package.
By 0932 GMT, the pan-European FTSEurofirst 300 index of top shares was down 0.3% at 823.78 points after gaining 2% on Friday.
Top aides to President Barack Obama on Sunday urged Democratic and Republican lawmakers to set aside political differences and quickly approve a massive economic stimulus package this week.
The Democratic-led Senate, with the help of a few Republicans, will vote on Monday to end debate on an $827 billion rescue package and clear the way for its passage on Tuesday.
“This week is very important because you’ve got the (G7) nations meeting at the end of the week, you’ve got the Obama bill going through, and you’ve got the second TARP proposal coming out,” said Justin Urquhart Stewart, director at Seven Investment Management.
Energy stocks took the most points off the index as crude fell 0.6%.
Britain’s BG Group lost 1.9% after it offered A$796 million ($538 million) for Australia’s Pure Energy, trumping a bid by Arrow Energy, in the latest deal in Australia’s coal seam gas sector as firms seek to boost their gas reserves.
BP, Royal Dutch Shell and Total were down 1-1.9%.
Across Europe, the FTSE 100 index was down 0.8%, Germany’s DAX was 0.7% lower and France’s CAC 40 was down 0.9%.
Banks were also in the doldrums, but stocks within the sector were mixed.
Britain’s Barclays soared 11.5% after reporting a 2008 profit of £6.1 billion, ahead of forecasts but down 14% on the year following 5.4 billion of charges on bad debts and other credit.
Unicredit gained 2.2% after the group said the bank’s €3 billion of capital measures will be fully subscribed. Its advisers Mediobanca have obtained commitments from institutions to take up €500 million.
HSBC was 1.3% lower after UBS said that it expects to build capital ratios via a dividend cut, and through an $11 billion rights issue or over-funding an acquisition.
Automobiles rose after French newspapers said that French President Nicolas Sarkozy will announce that the government will lend around €6 billion on two carmakers to help them cope with the financial crisis.
Renault and Peugeot were up 3.3% and 3.7% respectively.
Investors also turned to defensive drugmakers. Roche, Sanofi-Aventis and Shire were up 0.4-1%.