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London - European shares hit a two-week low on Tuesday with a further slide in crude oil prices hurting energy stocks, while the Greek market sank after the country's presidential election was unexpectedly brought forward.
The STOXX Europe 600 Oil and Gas dropped 1.2% after Brent oil slipped to a five-year low below $66 on worries over a swelling supply glut.
The FTSEurofirst 300 index of top European shares was down 1.2% at 1 378.50 points by 11:51 GMT, after falling to its lowest since late November with energy companies BP, Tullow Oil, Statoil and Total falling 1.7 to 2.1%.
"Lower energy prices are set to enhance consumer demand, while a stronger dollar will have an increasingly positive effect on European exports. The earnings estimates of consumer-oriented and cyclical sectors will improve in this environment," Christian Stocker, strategist at UniCredit in Munich, said.
"But commodity sectors like basic resources and oil and gas are set to remain under pressure given the pronounced excess supply of important industrial metals and oil."
Across Europe, Britain's FTSE 100 fell 1.2%, Germany's DAX was down 0.9% and France's CAC dropped 1.3%.
Greek stocks sank 10.2%, a day after the government announced it would bring forward a presidential vote by two months in a political gamble that heightened uncertainty over the country's transition out of its bailout.
Greek banks fell sharply, with National Bank of Greece down 12.7% and Alpha Bank dropping 13.2%.
Spain's IBEX and Italy's FTSE MIB fell 1.6% and 1.4% respectively, slightly underperforming core eurozone countries but off their lows.
"Compared to the height of the eurozone crisis, the political uncertainty is being limited to Athens at the moment, but that could change if the left-wing party win later in the month," Brenda Kelly, chief market strategist at IG said.
Greece's far-left Syriza party, which has vowed to end cooperation with lenders and reverse austerity measures, is currently leading in opinion polls.
Shares in British grocer Tesco plunged after another profit warning, down 10% after hitting their lowest in nearly 15 years.
Tesco slashed its full-year outlook by almost a third in the latest downgrade, triggered by an accounting scandal and intense competition in its home market. The European retail index fell 2%.
"This is clearly something that will weigh on their profits for the time being, but I do sense that a lot of the bad news is now baked in," IG's Kelly said.
