* FTSEurofirst 300 index down 1.1 percent
* Banks, energy stocks slip on recovery worries
* Weir Group weak as RBS downgrades
* For up-to-the minute market news, click on []
By Joanne Frearson
LONDON, Sept 22 (Reuters) - European shares fell on
Wednesday, with banks lower on lingering concerns over the pace
of the global economic recovery following the latest Federal
Reserve's assessment.
Economy sensitive banks featured among the worst performers,
with the STOXX Europe 600 Banks <.SX7P> down 1.7 percent.
Barclays <BARC.L>, UBS <UBSN.VX> and Banco Santander <SAN.MC>
fell 1.5 to 3.3 percent.
Sentiment in the banking sector was also hurt after
Britain's Liberal Democrats, part of the coalition government,
told banks on Tuesday to rein in bonus payments, saying they
risked being hit with higher taxes if they did not.
[]
By 0856 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was down 1.1 percent at 1,070.55 points
after closing 0.5 percent lower on Tuesday.
"Investors are realising things will have to deteriorate
first in the economy before the Fed is going to intervene,"
Philippe Gijsels, head of research at BNP Paribas Fortis Global
Markets in Brussels said. "Investors are taking profits."
The Federal Reserve on Tuesday opened the door for possible
further U.S. stimulus, although it made no policy shift at the
end of a one-day meeting, keeping overnight interest rates near
zero. []
"There was nothing in Fed comments to propel the market
higher. There isn't any catalyst to take the market higher from
where it was last night," a trader said.
Meanwhile, peripheral euro zone government bond yield
spreads over German benchmarks widened on Wednesday after the
Federal Reserve said it stood ready to provide more support for
the U.S. economy.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic showing breakdown in the correlation between
equities and bond yields
http://r.reuters.com/kan84p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> Energy stocks were on the downside as investors worried
about the demand outlook. BP <BP.L>, BG Group <BG.L>, Royal
Dutch Shell <RDSa.L>, Total <TOTF.PA> and Cairn Energy <CNE.L>
slipped 0.6 to 1.5 percent.
WEIR GROUPS FALLS
Weir Group <WEIR.L>, which made its debut on the FTSE 100
<> index at the start of this week, fell 2.9 percent, after
RBS cut its rating to "hold" from "buy" on valuation grounds.
German airline Deutsche Lufthansa <LHAG.DE> was 2.4 percent
lower as Nomura downgraded its rating to "neutral" from "buy",
keeping its target price steady at 13.3 euros.
The technical picture was bearish. The Euro STOXX 50
<>, the euro zone's bluechip index, fell 1.4 percent to
2,756.40 points, below its 200-day moving average of 2,777.59
points after trading above it in the previous session.
The index was also below the 61.8 percent Fibonacci
retracement of the its fall from an April high to a May low at
2,805.95 points for the second session.
Across Europe, the FTSE 100 <> index was down 0.8
percent, Germany's DAX <> fell 1.1 percent and France's
CAC 40 <> was 1.2 percent lower.
The Thomson Reuters Peripheral Eurozone Countries Index
<.TRXFLDPIPU> was down 0.8 percent.
(Additional reporting by Dominic Lau; Graphics by Scott Barber;
Editing by Hans Peters)
