LONDON: European shares fell on Tuesday, the last full trading day of the year, led lower by energy companies as Brent oil fell to a 5-1/2-year low on persistent concerns about a global supply glut.
The STOXX Europe 600 oil & gas index was down 1.9 percent at 1219 GMT, taking its loss for the year to 15 percent. The price of Brent oil is down by about half since June due to a big oversupply and tepid demand, hitting energy companies hard.
Explorers Seadrill and Tullow Oil were down around 3 percent. The UK FTSE 100 index fell 0.9 percent, underperforming its European peers, with London-listed energy majors BP and Shell down some 2 percent.
UK retailer Next bucked the trend, rising 3.2 percent after it lifted its full-year profit guidance on the back of a 2.9 percent rise in sales in the run up to Christmas.
Trading activity was broadly subdued, with uncertainty in Greece also weighing on markets ahead of a January election that the leftist anti-bailout Syriza party is tipped to win after years of recession.
"Given the fact that we had such an aggressive run up, certainly in the week before Christmas, people are quite happy to take (money) off the table," said Giles Watts, head of equities at City Index.
Greek shares were down 0.2 percent after falling nearly 4 percent on Monday, when the parliament in Athens failed to elect a head of state, triggering the early vote.
The FTSEurofirst 300 index of pan-European shares was down 0.5 percent at 1,369.61 points. The index has however gained 4 percent year-to-date, helped by expectations that the European Central Bank will unveil more market-friendly measures to stave off deflation.
"Contagion risks from Greece should be contained," Goldman Sachs analysts wrote in a note to clients. "The prospect of sovereign QE (bond-buying by the ECB) early next year, which we think will take place regardless of developments in Greece, is also acting to reduce spill-over effects in the...bond markets."
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