European Shares Fall Amid Oil Concerns

June 10, 2008 10:10 a.m. EST

London, UK (AHN) - European shares were lower Tuesday as markets reacted to lower gold prices and the continuing pressure from higher crude oil prices.

The pan-European Dow Jones Stoxx 600 was down a half point to 307. The U.K. FTSE 100 also lost ground, falling 0.5 percent to 5,849.

Elsewhere, France's CAC-40 slipped 0.8 percent to 4,763, a loss mirrored by Germany's DAX 30 which fell to 6,761.

Energy prices helped European financial shares fall in early trading as investors responded to overnight comments by U.S. Federal Reserve Chairman Ben Bernanke on the impact of higher oil prices on the threat of inflation. However, shares of banks such as UBS and BNP Paribas rebounded slightly later Tuesday morning.

The threat of crude oil that flirted with the $140 a barrel mark Friday sent Span's Repsol and Italy's ENI down 1.5 percent and 2 percent, respectively.

As food prices tighten, Tesco, the U.K.'s largest grocery chain, announced consumers were buying less non-food items, contributing to the company's stock dropping 2.7 percent.

However, there was one bright spot for the U.K.'s energy outlook, the nation's gas prices grew less than analysts had predicted.