European shares retreated from four-month highs on Friday, with banks slipping ahead of the Basel Committee meeting and on a report Deutsche Bank plans a capital increase of up to 9 billion euros ($11.4 billion). At 1103 GMT, the FTSEurofirst 300 index of top European shares was down 0.2 percent at 1,079.79 points. It closed on Thursday at its highest level since late April.
Financial stocks were among the top losers, with the STOXX Europe 600 banking index falling 0.7 percent. Barclays, Credit Agricole and Credit Suisse fell 1 percent to 2.3 percent. The Basel Committee of central bank and regulatory officials agreed a proposal for tougher new global bank capital rules on Tuesday but plans to keep the details confidential until Sunday.
"There is a little bit of nervousness ahead of exactly what's going to come out from the new regulation that is going to be discussed over the course of the weekend," said Henk Potts, equity strategist at Barclays Wealth. The recommendations go to the committee's oversight body, the Group of Governors and Heads of Supervision (GHOS), which meets in the Swiss city on Sunday, chaired by European Central Bank President Jean-Claude Trichet.
Deutsche Bank slipped 5 percent after two people familiar with the matter said Germany's top lender was considering a capital increase to bolster its balance sheet as Basel III capital requirements are finalised. "It shows that some may still need to go through the process and that speculation is probably being reflected in some of the financial prices that you have seen today," Potts added.
A big cash call would allow Deutsche Bank to raise its stake in Deutsche Postbank, in which it already owns just under 30 percent, and recapitalise that business, but is also seen as a move to tap the markets first before any rivals that need to raise funds once new capital rules are agreed. Deutsche Postbank shares were up 4.2 percent.
Miners came under pressure from lower metals prices, with copper falling on concerns about tighter policy in top consumer China. BHP Billiton, Anglo American, Rio Tinto, Xstrata and ENRC fell 1.2 to 2 percent. Spain's Gas Natural fell 3.9 percent after French utility GDF Suez sold its entire 5.01 percent stake through a block trade for a total of 540 million euros ($685.1 million).
BP was down 0.7 percent. The company said it would delay the release of its third-quarter results by a week because of added complexities in its accounts due to costs associated with the Gulf of Mexico oil spill. Mobile phone maker Nokia rose 4.3 percent after it hired Stephen Elop, the head of Microsoft's Business Division, to replace its chief executive. Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC40 fell 0.1 to 0.4 percent.
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