Weak US durable goods report hurts European shares

European shares fell in afternoon trade on Friday after data showed an unexpected fall in U.S. durable goods orders for August.

By 1301 GMT, the FTSEurofirst 300 of top European shares was down 0.3 percent at 984.37 points, after trading at 989.22 points before the announcement.

The index, which tumbled 1.9 percent to a two-week closing low on Thursday, is on track to record a loss of 2.2 percent on the week.

Banks were among the top losers, with Credit Suisse, UBS, Deutsche Bank, Barclays and BNP Paribas down 0.5-1.9 percent.

Julius Baer shed 6.4 percent after giving disappointing targets in a strategy update and saying it would not increase dividends or buy back shares.

New orders for long-lasting U.S. manufactured goods fell unexpectedly in August, dropping by their biggest margin in seven months, following a plunge in commercial aircraft orders.

"The market was hoping for a positive number and we have seen quite a weak number, which is perhaps going in the face of the fact that maybe the recession is over," said Mark Priest, a senior trader at ETX Capital.

Shares in European industrial engineering companies also lost ground, hit by demand concerns. Sulzer fell 3 percent, Alstom dropped 2.2 percent and ABB lost 2.4 percent.

Oil producers lent support to the index, holding onto earlier gains in crude prices, which turned negative in afternoon trade. BP, BG Group and Tullow Oil put on 0.6-2.4 percent.

Around Europe, UK's FTSE 100 index was up 0.2 percent, Germany's DAX index eased 0.5 percent and France's CAC 40 lost 0.4 percent.

U.S. stock index futures also pointed to a weaker start for Wall Street.