European shares fell on Thursday from the previous session's 28-month highs on concern euro zone inflation pressures could spark a rise in interest rates, while miners were hit by a waning outlook for Chinese copper demand. The pan-European FTSEurofirst 300 index of top shares was 0.6 percent lower at 1,157.34 points after jumping 1.5 percent on Wednesday.
Euribor futures fell across the 2011-12 curve, implying a rise in interest rate expectations. However the ECB left rates at a record-low 1 percent on Thursday, a level President Jean-Claude Trichet deemed "still appropriate". Miners slipped, tracking copper prices lower on concerns demand may wane as the Chinese New Year, at the beginning of February, approaches. Antofagasta, BHP Billiton and Xstrata fell by between 1.1 and 2 percent.
In earnings news, Tesco lost 4.3 percent after the world's third-biggest retailer missed Christmas sales forecasts as purchases of non-food goods were hit by severe weather. Swiss sanitary equipment maker Geberit dropped 7 percent after fourth-quarter sales missed market expectations. Steel tubemaker Tenaris fell around 1.2 percent on talk it was guiding lower on fourth-quarter EBITDA, a view later confirmed by an analyst after attending a company presentation in New York.
Successful bond auctions in Spain and Italy improved sentiment towards euro zone issuers struggling with debt a day after the Portuguese auction drew healthy demand. Spain's IBEX 35 rose 2.7 percent, Portugal's PSI 20 was 0.4 percent higher and Italy's benchmark was up 0.9 percent. Banking stocks, hit by the sovereign debt crisis, were in demand. Spain's Banco Santander and BBVA gained 4.8 percent and 6.3 percent respectively after the auction. Across Europe, the FTSE 100 index was down 0.4 percent, Germany's DAX was 0.1 percent higher and France's CAC 40 was up 0.8 percent.
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