London: European shares fell on Monday morning, tracking losses in Asia, with mining and energy shares hit by lower commodities prices as the US dollar strengthened.
At 2:13pm, the FTSEurofirst 300 index of top European shares was down 1.5% at 872.0 points.
But the European benchmark index is up more than 35% from the record low it hit on 9 March, as investors have become more confident on the prospects for economic recovery.
The dollar rose across the board on Monday after Russia said the US currency’s role as the world’s main reserve currency was unlikely to change in the near future, hitting energy and commodity prices and related shares.
With the price of copper and other metals sliding, Anglo American, Antofagasta, BHP Billiton, Lonmin, Rio Tinto and Vedanta Resources fell between 1.6 and 4.5%.
Among oil stocks, Total, ENI, BP and Royal Dutch Shell fell between 1 and 1.6%, as crude prices slipped below $71 a barrel, before a slight recovery.
Across Europe, Britain’s FTSE 100, Germany’s DAX and France’s CAC-40 were between 1.7 and 2% lower.
Among banks, Banco Santander, Credit Suisse, Deutsche Bank, HSBC, Societe Generale and UBS fell between 1.2 and 2.5%.
Switzerland’s Holcim fell 1.8% after the world’s second-largest cement maker said it would buy the Australian operations of Mexico’s Cemex for $1.64 billion and that it was planning a capital increase to raise the funds.
Shares in Air France-KLM fell 4.3% after Citigroup cut its rating on the stock to “hold” from “buy”.
Citigroup also increased its forecast for a first-quarter operating loss for Air France to €89 million from €1 million, down from a profit of €234 million a year ago.
Bayer dropped 3.8% after the chief executive of its pharmaceutical unit, Bayer Schering Pharma, told a newspaper that price pressure in the industry was intensifying due to the economic crisis.
Chemicals companies BASF and Akzo Nobel, were down 1.7 and 2%, respectively.
In a note, Credit Suisse said its analysis “does not offer a blanket buy for cyclical sectors. There appear to be as many cyclical sectors well priced for recovery as those under-pricing it. Oils, chemicals and capital goods are among the former, with real estate, travel & leisure and software among the latter.”
World number two truck maker Volvo fell 3.5% after saying its truck deliveries in May fell 57% from a year earlier as the global downturn weighed on demand for commercial vehicles across its main markets.
In economic news, Switzerland’s largest business association, economiesuisse, said GDP would shrink 2.9% this year and unemployment rise to 4% as recession bites deeper.