London - European shares fell on Monday, hit by forecast-lagging results from banking heavyweight HSBC and a retreat in investor risk appetite after Libya tensions and the price of oil both rose again. Europe's biggest bank, HSBC, fell 3% to lead fallers across all sectors after it posted results which fell short of forecasts.
At 08:39 GMT the pan-European FTSEurofirst 300 index of top shares was down 0.4% at 1 154.84 points. The market had gained 1.2% on Friday, snapping a week long selloff that had been biggest since July 2010.
"There's little reason to believe traders will deviate the core of their attention in the short term from volatility in oil prices and the evolving geopolitical structure throughout North Africa and the Middle East as the next trading month rolls around," Terry Pratt, institutional trader at IG Index, said.
Tensions in Libya heightened over the weekend after Muammar Gaddafi rebuffed calls to step down as leader and rebels in the eastern city of Benghazi said they would take the fight to the rest of the country.
Concern about the escalating violence and fears it could spread to other, more crucial oil-producing states pushed the Brent crude oil price for April delivery up 1.4% to $113.69 a barrel in early morning trade, although it is still short of last week's high of nearly $120 a barrel.
The early stock market falls were a combination of the HSBC and Libya news, said a London-based trader at a leading investment bank.
"Over the weekend we definitely had the realisation that macro fears are still as pre-eminent as ever."
The VDAX-NEW volatility index, Europe's main barometer of investor anxiety, was up 5%, reversing most of Friday's fall.
The higher the volatility index, based on sell and buy options on Frankfurt's top-30 stocks, the lower investors' appetite for risky assets such as equities.