European shares lower

European shares fell for a fourth straight session in light trading on Tuesday, with record-high yields at a Spanish debt auction weighing on banks and showing investors are far from convinced the eurozone is on track to solve its debt crisis. Spain paid the highest yields in 14 years to issue short-term bills, lifting yields on Spanish, Italian and French notes on the secondary market. The eurozone banks which own the bulk of that debt fell 3.1 percent.
The FTSEurofirst 300 index of top European shares closed down 0.6 percent at 914.19 after hitting a seven-week low of 914.89 in intra-day trading. Volumes on the index were light at 79 percent of their 90-day average, with fund managers saying they were reluctant to make moves on the last full trading day for the US ahead of the Thanksgiving holiday on Thursday.
"It's a pretty uncertain environment right now, we're not trading at the moment in either direction," said James Buckley, who helps manage $1 billion at Baring Asset Management and owns positions in defensive plays such as Nestle and Imperial Tobacco. Food and beverage stocks, up 0.9 percent, were the top performers as investors sought shelter from a deteriorating macro environment, underpinned by weaker-than-expected US GDP data for the third quarter.
Rising sovereign yields and capital concerns pummelled eurozone banks, which have lost nearly 14 percent in the last seven sessions. Commerzbank, down 15 percent, was the biggest faller on the FTSEurofirst 300 on volume more than double its 90-days average. Sources close to the German lender said it may need considerably more capital than previously expected to meet a core capital buffer of 9 percent of assets by mid-2012, as demanded by the EU's banking watchdog. Deleveraging by eurozone banks could affect up to 10 percent of assets held by the region's lenders, or between 500 million euros and 3 billion euros, according to BarCap forecasts.