Paris - European stocks fell in early trading on Thursday after the US Federal Reserve took an upbeat view on the US economy and signalled that it remains firmly on track to raise interest rates this year.
Vallourec featured among the top losers, falling 6% after the steel pipes maker warned of an impairment charge of €1.0bn to €1.2bn on the value of its assets, blaming turmoil in the oil market.
"It will translate into a big net loss in 2014 and will deteriorate Vallourec's gearing. Also, Vallourec has not impaired anything in the US, whereas market conditions (there) are deteriorating rapidly as well," a Paris-based trader said.
Royal Dutch Shell fell 4.2% after the oil major said it will cut spending by $15bn over the next three years.
Bucking the trend, shares in Austrian lender Raiffeisen Bank International gained 11%, bouncing from recent sharp losses, after the bank said it is planning to extend its capital buffer with a reduction of risk-weighted assets (RWA) of at least 20%, which will also affect its Russian business.
At 10:52, the FTSEurofirst 300 index of top European shares was down 0.6% at 1 465.61 points.
The Fed said the US economy was expanding "at a solid pace" with strong job gains. It repeated it would be "patient" in deciding when to raise benchmark borrowing costs from zero, though it also acknowledged a decline in certain inflation measures.
The statement took investors by surprise, sparking a sell-off on Wall Street with The Dow Jones industrial average falling 1.1%, the S&P 500 dropping 1.4% and the Nasdaq Composite losing 0.9%.
"The bullish tone by the Fed on the economy caught investors off-guard," said John Plassard, senior equity sales trader at Mirabaud Securities in Geneva.
"Meanwhile, investors are fretting about Greece again, and it could go on for a while. What happened yesterday, with Athens's bourse losing 9%, is spooking investors. That said, it's too early to draw conclusions about the new government."
Around Europe, UK's FTSE 100 index was down 0.9%, Germany's DAX index down 0.7%, and France's CAC 40 down 0.6%.
Greek banking shares rebounded on Thursday to recover some ground after having fallen to record lows in the previous session. The Athens Stock Exchange FTSE Banks Index, which had slumped 27.7% on Wednesday, rose 7.9%, with National Bank of Greece up 6.7% while Alpha Bank was up 11.8%.
Athens' broader ATG benchmark equity index was up 1%, clawing back some ground after falling 9.2% on Wednesday.
Greek financial markets had been hit on Wednesday after leftist Greek Prime Minister Alexis Tsipras threw down an open challenge to international creditors by halting privatisation plans agreed under the country's bailout deal.