London - European shares fell on Wednesday, weighed down by below-forecast earnings reports and fears of more corporate defaults in China as a persistent decline in the copper price hit the mining sector.

The STOXX Europe 600 personal and household goods sector fell 1.5 percent, to be the top sectoral decliner, led lower by a 4.2 percent drop in Tod's after the Italian luxury shoemaker posted a drop in 2013 profit and said it was cautious about prospects for 2014.

Fellow luxury goods firm Swatch fell 1.2 percent and, in the same sector, tobacco firm British American Tobacco , was one of several UK-listed stocks to trade without entitlement to its latest dividend payout, hitting its shares.

The basic resources sector was also a heavy faller, down 1.2 percent after Shanghai copper fell by its five percent daily limit.

London copper hit a 44-month low on growing concerns over credit-linked defaults in China, the world's top consumer of the metal where copper is often put up as collateral for lending.

“There will be more corporate defaults in China, but provided they can be ringfenced in the smaller banking and finance area, the it won't have a lasting systemic impact on global and financial markets,” Jeremy Batstone-Carr, analyst at Charles Stanley, said.

“Markets are on red-alert for the possibility that we'll see more and bigger defaults as time passes. The bigger concern is that wound up in these defaults is the threat of a Chinese slowdown over and above that which is pencilled in,” he said.

The pan-European FTSEurofirst 300 fell 0.7 percent to 1,312.36 points, taking falls in the last 9 days to 2.7 percent.

Stock markets have been under pressure since a deterioration in the situation in Ukraine at the beginning of last week, when Crimea effectively fell under Russian control, prompting the worst East-West crisis since the Cold War.

While traders cited the preparation of sanctions by the EU and United States against Russia as risking retaliation that could hurt economies in the region, the crisis was seen as having less of an impact than it had done in recent sessions.

“Event risk for Ukraine is now almost fully priced in,” Alex Chehade, Senior Dealer at TradeNext, said in a note.

“There will be no solution in the near term but it seems the idea of armed conflict is currently shelved.” - Reuters