European shares declining on banks and insurers (MarketWatch) (09-05-2008)

LONDON (MarketWatch) - European shares were lower on Friday morning, as financials came under pressure on news from AIG for plans to raise more capital after a steep quarterly loss and as word got out of a possible plan by Citigroup to sell $400 billion worth of assets.

 The pan-European Dow Jones Stoxx 600 index fell 0.7%, to 327.10 as lenders such as HSBC Holdings, down 1.6%, and Barclays, down 2.2%, led the banking sector lower.

 The losses came amid fresh evidence that credit market turmoil is still a problem for the financial sector. AIG reported a $7.81 billion first-quarter net loss late Thursday and said that it intends to raise $12.5 billion in capital and a report in the FT said that Citigroup will consider selling around $400 billion of non-core assets as part of a plan to slash costs and reinvigorate profit growth appeared in the Financial Times on Friday.

 Of national indexes, the U.K. FTSE 100 index declined 0.5% to 6,238.90 and the German DAX 30 index lost 0.7% to 7,024.01, while the CAC-40 index fell by 1.4% to 4,985.80 as several top French companies, including Suez and Vivendi, started to trade without rights to dividend payouts. Losses of 2.5% from bank Societe Générale also didn't help broader French share performance.

  Source MarketWatch