European shares slip

LONDON, Jan 5 (Reuters): Concerns over Greece's future in the euro zone and a sharp decline in commodities stocks triggered by lower crude oil and metals prices kept European equities under pressure on Monday.

The pan-European FTSEurofirst 300 index was down 0.4 per cent at 1,357.71 points by 1137 GMT, with benchmark indexes in London, Frankfurt and Paris also falling 0.5 to 0.8 per cent.

Energy and mining stocks fell the most, with the European oil and gas and the basic resources indexes falling 2.6 per cent and 2.2 per cent respectively after a supply glut sent oil prices to a 5-1/2-year low and copper hit a 4-1/2-year trough due to a stronger dollar.

With political uncertainty in Greece rattling markets before elections later this month, German Vice-Chancellor Sigmar Gabriel said the German government wanted Greece to stay in the euro zone.

The Jan. 25 election in Greece could vault the left-wing Syriza party into power, raising the risk of a sovereign default and severe losses for the European Central Bank on any Greek bonds it holds.

"If Greece is seen to be an issue which continues to contaminate the euro zone, maybe it's the time to think more seriously about reforming the euro zone," Peter Dixon, equity strategist at Commerzbank, said.

Share on Google Plus

About Jessica Hornberger

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.