European shares fell by midday on Tuesday as investors took profits following Monday's gain of more than 3 percent, with energy stocks the biggest losers on the index. By 1136 GMT, the pan-European FTSEurofirst 300 index of top European shares was down 1.2 percent at 775.42 points after being as high as 788.34 points earlier.
Howard Wheeldon, strategist at BGC Partners, said: "It is profit-taking after a good day yesterday. There is still a lot of uncertainty in the market, volumes are low."
Energy stocks took the most points off the index ascrude retreated to around $46 a barrel after rising to over $47 earlier in the session.
BG Group, BP, Royal Dutch Shell and Total were down 0.5-2.7 percent.
The banking sector was also lower, although individual stocks were mixed. Charlie McCreevy, EU Internal Market Commissioner told a conference that market turbulence should prompt policy makers to reform banking oversight.
UBS, HSBC, Banco Santander and ING lost 1.5-5.7 percent.
Barclays gained 2 percent after jumping 73 percent in the previous session. The bank said on Monday that it was not seeking fresh capital.
Lloyds Banking Group and Royal Bank of Scotland were up 5.5 percent and 8.9 percent, respectively.
But non-life insurers were in the doldrums, with Allianz, Munich Re and Zurich down 2.4-4.2 percent.
Across Europe, the FTSE 100 index was down 1.8 percent, Germany's DAX was 1.2 percent lower and France's CAC 40 shed 1.5 percent.
"We were flat at the open and now we are giving back some of the gains we saw yesterday…overall the mood of the past few days has been encouraging, but still we have bad news on the corporate side," said Philippe Gijsels, strategist at Fortis Bank in Brussels.
SIEMENS GAINS
German industrial conglomerate Siemens rose 4 percent after the group said it stuck with its outlook after a good start to fiscal 2009 amid the brutal knock-on effects of the credit crisis and an 8 percent drop in new orders in the first quarter.
Dutch telecoms group KPN was 3.3 percent higher after it reported fourth-quarter core earnings in line with expectations.
Pharmaceuticals were lower. AstraZeneca, GlaxoSmithKline and Sanofi-Aventis were down 0.3-0.8 percent.
On Monday Pfizer proposed a $68 billion acquisition of Wyeth which analysts said may accelerate the pace of cost cutting.
"It's really very simple. The drug industry has not produced enough new drugs to support its expenses. That's really the whole answer," said Mike Krensavage, principal at Krensavage Asset Management.
"The expenses are still too high in the drug industry. They will need to come down. This is one way to do it," he added.
