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Weaker energy stocks hit European equities, Greek shares slump
* FTSEurofirst 300 falls 1.3 pct, Greek shares sink 6.6 pct
* Tesco (Xetra: 852647 - news) slumps after another profit warning
* Energy stocks track weaker crude oil prices
By Atul Prakash
LONDON, Dec (Shanghai: 600875.SS - news) 9 (Reuters) - European shares hit a two-week low on Tuesday, with a further slide in crude oil prices hitting energy stocks.
Greek stocks sank 6.6 percent, a day after the government announced it would bring forward a presidential vote by two months. Greek banks fell sharply, with National Bank (NYSE: NBHC - news) of Greece down 8.8 percent and Alpha Bank (Other OTC: ALBWF - news) dropping 7.9 percent.
Shares (Frankfurt: DI6.F - news) in British grocer Tesco plunged after another profit warning, down 11.9 percent after hitting their lowest in nearly 15 years. Tesco slashed its full-year outlook by almost a third in the latest downgrade, sparked by an accounting scandal and intense competition in its home market. The European retail index fell 2.4 percent.
The STOXX Europe 600 Oil and Gas index was the biggest sectoral decliner, down 2.5 percent, after Brent oil slipped to a five-year low below $66 a barrel after a drop of more than 4 percent the day before on worries of a swelling supply glut.
"Typically, lower oil prices are good for the world economies and some other companies and sectors. Nevertheless, the quick drop is creating some nervousness and volatility," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.
"Weak oil and commodity prices in general are probably signalling that the recovery of the world economy is weak."
The FTSEurofirst 300 index of top European shares was down 1.3 percent at 1,377.28 points by 0857 GMT, after falling to its lowest since late November, with energy companies like BP, Tullow Oil (LSE: TLW.L - news) , Statoil (Xetra: 675213 - news) and Respsol falling 2 to 3.2 percent.
"Lower energy prices are set to enhance consumer demand, while a stronger dollar will have an increasingly positive effect on European exports. The earnings estimates of consumer-oriented and cyclical sectors will improve in this environment," Christian Stocker, strategist at UniCredit (Milan: UCG.MI - news) in Munich, said.
"But commodity sectors like basic resources and oil and gas are set to remain under pressure given the pronounced excess supply of important industrial metals and oil."
Across Europe, Britain's FTSE 100 fell 1.4 percent, Germany's DAX was down 1.3 percent, France's CAC dropped 1.7 percent and Italy's FTSE MIB (Editing by Janet Lawrence)
