European shares slip on mounting Middle East worries

Photo: REUTERS

FTSE down 0,8% in early trade on Wednesday as investors eye Libya.

HARPREET BHAL

Published: 2011/03/02 11:03:15 AM

European shares fell on Wednesday on mounting worries political unrest in the oil-rich Middle East and North Africa region could result in persistently high energy prices and derail global economic recovery.


By 0803 GMT, the pan-European FTSEurofirst 300 index of top shares was down 0,8% at 1 152,26 points.


Brent crude rose to above $115 to 2-1/2 year highs as tension in Libya escalated, and investors worry that the uprising could spread to Saudi Arabia where human rights activists said authorities had detained a Shi’ite cleric, sparking fears of sectarian strife.


"If crude prices are going to go up to $125 to $130 a barrel then I think that more and more of the consumption expenditure in the US is going to have to be spent on gasoline and can’t be spent on other durable goods. That is going to weigh on economic recovery," said Koen de Leus,strategist at KBC Securities Bolero in Brussels.


Among individual fallers, Swiss Re fell 4% after the reinsurer said claims from the recent earthquake in New Zealand would cost it around 800 million Swiss francs, meaning 2011 could become a high claims year overall.

REUTERS