LONDON, Aug 5: European shares remained down but off their lows on Monday as stocks on Wall Street opened weakly, amid continuing concerns about the global economic outlook.

Swedish telecom gear maker Ericsson led the blue chip fallers due to a toxic cocktail of negative broker comment and financing concerns, but also knocked were beat-up insurers as investors once again fretted over the impact of an extended bear market on their asset bases and reacted to additional worries over a possible fire-sale by a key Swiss investor.

The FTSE Eurotop 300 index of pan-European blue chips was 1.9 per cent lower while the narrower DJ Euro Stoxx 50 index was 1.7 per cent weaker. Both had been down by as much as three per cent earlier in the day.

Declining stocks outnumbered the fallers by about five-to-one.

Basic resources, insurance, chemical, tech and retail led the sectoral loserboard based on the DJ Stoxx series of indices.

The FTSE Eurotop 300 is about nine per cent higher than the five-year intra-day low plumbed on July 24 but is down nearly 30 per cent for the year to date.

Investors will get another insight into the health of the US economy when the Institute for Supply Management releases its non-manufacturing index for June.

The equivalent data for the manufacturing sector hit the market hard last week, compounding poor figures on jobs, GDP growth and consumer confidence.

In New York the Dow Jones industrial average slipped 0.6 per cent and the tech-laden Nasdaq Composite eased 0.5 per cent.

Shares in telecoms gear maker Ericsson dropped 13.4 per cent to just over eight Swedish crowns, stung by negative comment from both Deutsche Bank and CSFB.

Deutsche lowered its target price for Ericsson and CSFB cut its fair value estimate to seven crowns from 10 crowns.

That raised fears that BZ might sell its direct stakes in companies including engineering group ABB, bancassurers Credit Suisse and Baloise, and chemicals firm Lonza.

ABB and Credit Suisse shares dropped between seven and nine per cent each.

British banking giant HSBC was among only a handful of bright lights, reporting earnings at the top end of market expectations and offering reassurance on bad debt provisions.

Shares in Fiat also bucked the downward trend as investors cheered the Italian car maker’s progress in cutting back its debt. That was after the group announced the sale late on Friday of casting subsidiary Teksid’s aluminium unit for about 460 million euros.

Shares in Lundbeck shed 8.2 per cent after the Danish Medicines Agency said the drug company’s second generation anti-depressant drug, Cipralex, had no clear advantages to its top-selling predecessor Cipramil, whose patent expired in Europe at the end of last year.

Meanwhile, shares in German financial group MLP soared 11 per cent as bargain-hunters bought the battered stock, having seen it halve at the end of last week due to fears over its accounting practices and after it issued a profit warning.—Reuters