Financials pull down European shares

European shares ended the day substantially lower tracking Wall Street as US banks Morgan
Stanley and Fifth Third Bancorp disclosed further credit-related problems. Financials led the decline, with Royal Bank of Scotland down 5%, UBS 4% and Santander 2.3%.

Sliding crude prices hit the energy sector – BP fell two per cent – though ironically airline shares slumped after downgrades related to the high cost of oil.

Sainsbury’s, Britain’s third largest supermarket chain, lost 3.7% after saying sales growth slowed in the first quarter as higher living expenses in Britain cut into consumer spending on food and clothes.

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