Banks Lead Europe Stocks Lower; Solar Stocks Fall

By 0828 GMT the pan-European FTSEurofirst 300 index was down 1.4 percent at 836.83 points.

European shares were lower in early trade on Tuesday, giving back some of their hefty gains from the previous session, as banks and defensive utilities fell.

By 0828 GMT the pan-European FTSEurofirst 300 index was down 1.4 percent at 836.83 points. It had risen 6.9 percent on Monday.

Banks took the most points off the index. HSBC, Santander, HBOS and Deutsche Bank fell 2-3.9 percent, while Anglo Irish Bank slumped 10 percent.

The world's largest maker of solar cells, Q-Cells. slumped 26 percent after the group said it is reducing its forecast for the 2008 financial year due to short notice unexpected developments.

Other solar stocks also fell.

Later in the session all eyes will be on the German ZEW economic sentiment index which is forecast to fall to -55.0 in December from -53.5 in November. Current conditions index seen dropping to -60.0 from -50.4.

Justin Urquhart Stewart, director at Seven Investment Management, said: "German investor sentiment is likely to remain incredibly weak for the time being as they see a fall in demand for capital and retail goods."

U.S. pending home sales for October are due at 1500 GMT. Economists in a Reuters survey expect a 3.2 percent fall, compared with a 4.6 percent decline in the previous month.

"U.S. pending home sales is crucial ... for any signs of an easing of the slowdown. This would be greeted with enthusiasm. But for now, it is still likely to be negative," said Urquhart Stewart.

Across Europe, the FTSE 100 index was down 1.3 percent, the German DAX index was down 1.6 percent and France's CAC index was down 1 percent.