European shares slip as weak oil weighs on energy stocks, miners

  • Reuters
  • Stock Market News
European shares slip as weak oil weighs on energy stocks, miners
Credit: © Reuters.

* STOXX 600 down 0.3 pct, gives up earlier gains

* Oil drop weighs on energy shares, miners

* Eurotunnel falls as Barclays (LON: BARC ) cuts to sell

* Germany's DAX hits fresh record high (Recasts, adds quote and detail, updates prices)

By Helen Reid and Kit Rees

LONDON, June 20 (Reuters) - Euro zone shares reversed course on Tuesday after a strong start to the session as a drop in the price of oil hit energy firms and mining stocks.

Germany's DAX hit a fresh record high on Tuesday, bolstered by another day of gains for tech and retail sectors.

But euro zone blue chips .STOXX50E eased to trade 0.1 percent lower while the regional STOXX index .STOXX was down 0.3 percent, retreating from a two-week high.

Europe's oil & gas sector .SXEP fell nearly 2 percent with heavyweight majors Royal Dutch Shell (LON: RDSa ) RDSa.AS and BP .BP.L down 2.1 percent and 1.5 percent respectively after oil price hit seven-month lows. O/R

The related mining sector .SXPP also dropped 2.3 percent.

"What we are starting to see is the enthusiasm in the oil price that was bred by the OPEC cuts ... diminish, and as that diminishes, people are once more paying attention (to) the fundamentals and the heavy oversupply that we're seeing on the oil market, and that's really causing some downside pressure," Jonathan Roy, advisory investment manager at Charles Hanover Investments, said.

Britain's blue chip FTSE 100 .FTSE index, the worst-performing major benchmark in Europe this year, fell 0.2 percent, hit by its heavy weighting on commodities stocks.

"Investors across Europe are taking cue from the downside we're seeing in London and, looking at the quite heavily overbought conditions that we're seeing in Europe, are taking that as a cue to take some money off the table," Charles Hanover Investments' Roy added.

Aside from the slide in oil-related stocks, Germany's Prosiebensat 1 PSMGn.DE was a bright spot, after it sold its online travel agency Etraveli to CVC. Germany's benchmark DAX .GDAXI index touched a fresh record high before retreating 0.1 percent. are slightly surprised that the company did not sell a group of travel assets, but management suggests the rest of the travel portfolio remains under review," they added.

Groupe Eurotunnel GETP.PA , which runs Eurostar trains, fell more than 6 percent after suffering its second broker downgrade in as many weeks. Barclays cut the firm to a 'sell', citing slowing traffic and recent UK attacks which could impact tourism appetite. downgrade from Credit Suisse (SIX: CSGN ) sent business support services group DKSH DKSH.S down 3.8 percent. The Swiss broker said it expected the firm's growth rate to slow with downside risks including political uncertainty and demographic headwinds in Thailand weighing. real estate company Castellum CAST.ST fell 3.9 percent after pension fund AP2 sold the majority of its stake. europe this year


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