European shares extend falls; banks down

European shares extend falls; banks down

London: European shares extended falls on Friday, with investors disappointed on U.S. stimulus measures, and banks lower after Goldman Sachs downgraded target prices across the sector.

At 0929 GMT, the FTSEurofirst 300 index of top European shares was down 1% at 930.51 points. The STOXX Europe 600 Banking Index fell 2.1%.

US President Barack Obama challenged Congress on Thursday to enact a $447 billion package of tax cuts and new spending to revive a stalled job market, though traders and strategists said it would only have a limited effect on investors’ confidence, especially as it may not be passed.

Stocks fell across the board, with the STOXX Europe 600 Basic Resources Index losing 0.6% as copper prices fell.

“Investors are holding back because they can’t read the market. There isn’t any reason to commit until you can see credible policies," Justin Urquhart Stewart, director at Seven Investment Management, said.

“Bernanke was never going to say anything. He made it clear at Jackson Hole he was pushing it back to the politicians. Obama has come up with this stimulus package. We now have to digest what effect this will have, assuming it is passed."