European shares slide

European shares gave back a hefty slice of October's gain and recorded their biggest one day loss in over a month on Tuesday as shock Greek plans for a referendum on its eurozone bailout package sparked heavy selling across all sectors. Eurozone banks and insurers led the retreat, with declines of 8.8 percent and 8.6 percent, respectively, but no sector was immune and the FTSEurofirst 300 was down 3.4 percent at the close.
"Banks are in for a very tough time for another year and a half, two years, probably, so we remain very underweight banks," said Wayne Bishop, fund manager at King & Shaxson, which manages 145 million pounds ($234 million) in assets out of London. French banks, due to report earnings over the next two weeks, were among the worst hit, with Societe Generale, BNP Paribas and Credit Agricole all posting double-digit declines.
Illustrating that point, Italian and Spanish bond yields rose, their spread to German bunds widened and Italian stocks underperformed the wider market, ending down 6.8 percent as traders factored in increased contagion risk. Volatility, as measured by the Euro STOXX Volatility index, a measure of equity investor "fear", meanwhile, surged 22 percent to record its biggest one-day gain since mid-August, while volumes on core eurozone bourses surged.
Germany's blue chip DAX ended the day down 5 percent in volume at 148 percent of its 90-day daily average, compared with 128 percent for the FTSEurofirst 300. After financials, other cyclical sectors including miners and automakers were among the most heavily sold off on the debt-crisis/growth-fear double-whammy, with the STOXX Europe 600 Autos index down 5.8 percent by the close.
Corporate earnings for investment bank Credit Suisse and Danske Bank both lagged forecasts, prompting large cost-cutting plans. They ended down 8.2 percent and 6.8 percent, respectively. Dutch food and chemicals firm DSM, down 1.1 percent, and UK-listed Imperial Tobacco, flat, were relative outperformers, meanwhile, on the back of forecast-beating results.
By the close on Monday, of the 276 STOXX Europe 600 firms due to report in the third-quarter earnings season, 43 percent had done so, with 52 percent beating or meeting expectations and the rest missing. The average miss so far, meanwhile, is 0.3 percent, the data showed, while the average forecast miss for those still to report is 3 percent.