European shares hit 3-week low

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Paris - European shares dropped on Wednesday, mirroring a pull-back on Wall Street and in Asia as mounting worries over violence in Iraq prompted investors to book profits after a strong run.

Shares in GDF Suez dropped 3.1 percent after the French state sold a 3.1 percent stake at a price of 20.18 euros per share, the bottom of a range for the share placement set by bookrunners on Tuesday evening.

By 09:55 SA time, the FTSEurofirst 300 index of top European shares was down 0.7 percent at a three-week low of 1,377.61 points.

The index had hit a 6-1/2 year high last week, before geopolitical worries sparked a bout of profit-taking.

Security forces fought Sunni armed factions for control of the country's biggest oil refinery on Tuesday and militants launched an attack on one of its largest air bases less than 100 km (60 miles) from the capital.

The Iraq crisis spurred selling on Wall Street late on Tuesday, with the Dow Jones industrial average staging its biggest one-day fall for a month.

“The situation in Iraq is rattling investors, and there's a risk of escalation if the US decides to intervene there. This is what triggered a sell-off in the last hour of trading on Wall Street,” Montaigne Capital fund manager Arnaud Scarpaci said.

“But the real market direction should come from US growth figures later today, given the recent doubts about the pace of the economic recovery.”

A raft of US macroeconomic data is due on Wednesday, including the final reading of first quarter GDP at 14:30 SA time, seen down 1.7 percent, according to a Reuters poll.

Wednesday's market retreat was led by shares of resource-related companies, with ArcelorMittal down 2.3 percent, Glencore 1.5 percent and BP 1.3 percent. - Reuters



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