Dow Jones/London


A woman carries a Tesco shopping bag outside a branch of the supermarket in London yesterday. Tesco shares plunged 16% for the day, sinking the rest of the European retail sector
Most European stock markets fell yesterday, as the retail sector came under heavy selling pressure after Tesco announced disappointing holiday trading sales, while well-received debt sales in Spain and Italy boosted banking shares.
The Stoxx Europe 600 index closed down 0.2% at 249.50, after trading as high as 252.28 earlier in the session.
Tesco, the biggest loser in the index, plunged 16% in London, sinking the rest of the European retail sector.
J Sainsbury dropped 5.4%, while Wm Morrison Supermarkets moved down 5.6%. Home Retail Group fell 6%. The big drops in retail shares pulled the UK FTSE 100 index down 0.2% to 5,662.42.
In Brussels, Delhaize Group sank 11% after the food retailer announced plans to shed 5,000 jobs on the heels of disappointing fourth-quarter sales.
Also among the biggest losers was Danish wind-turbine manufacturer Vestas Wind Systems, trading down 7.1% on news that the company will need to cut nearly 10% of its workforce.
Adding to the negative markets sentiment yesterday were data from the US Labor Department, showing that new claims for unemployment benefits rose 24,000 to 399,000 last week, the highest level since late November.
“One thing that encouraged investors in recent months has been the surprisingly strong macroeconomic data from the US, especially for employment.
Keeping the markets from falling further, successful debt sales in Italy and Spain boosted banking shares.
The Italian FTSE MIB index outperformed other European indexes and put on 2.1% to 15,192.79, after the government succeeded in selling €12bn at low borrowing costs.
In Madrid, the IBEX 35 index closed flat at 8,427.
Among banks, Bankinter SA rose 1.8% as Banco Bilbao Vizcaya Argentaria SA rose 0.8%.
Royal Bank of Scotland Group gained 5.6% after the bank announced a broad-based restructuring in which 3,500 jobs will be cut.
In France, BNP Paribas SA rose 3.8% and Societe Generale SA put on 2.5%. The CAC 40 index, however, shed 0.2% to 3,199.98.
In Germany, Commerzbank and Deutsche Bank traded 5.8% and 2% higher, respectively, boosting the DAX 30 index, which closed 0.4% higher at 6,179.21.