European shares fell on Tuesday, with mining shares led lower by a slump in Anglo American to a new record low, and a top pan-European index falling to a 6-week low. The FTSEurofirst 300 index fell 1.8 percent to 1,437.77 points, its lowest close since late October, with the STOXX Europe 600 Basic Resources sector dropping 6.6 percent to its lowest level since March 2009.
Shares in Anglo American sank 12.3 percent after the miner announced restructuring steps, including plans to consolidate into three business units from six, sell more assets and suspend dividends for the second half of this year. BHP Billiton fell 5.5 percent after a deadly dam burst at a Brazilian iron ore mine triggered a civil lawsuit, seeking 20 billion reais ($5.31 billion) in environmental and property damages from mine operator Samarco and its owners, BHP and Vale.
Miners also suffered from lingering concerns about demand from China, the world's top metals consumer. China's trade performance remained weak in November, casting doubt on hopes that its economy would level off in the fourth quarter and spelling more pain for its major trading partners. "It is increasingly become clear that the world's second largest economy is still far off from turning the corner despite countless measures like several rate cuts," Markus Huber, senior analyst at Peregrine & Black, said.
Chinese exports fell a worse-than-expected 6.8 percent from a year earlier, their fifth straight month of decline, while imports tumbled 8.7 percent, their 13th drop in a row. Glencore dropped 6.9 percent, with Rio Tinto down 8.4 percent. The FTSEurofirst 300 index has fallen around 6 percent since the European Central Bank's decision to cut its deposit rate and extend its stimulus programme last Thursday fell short of lofty market expectations for further dovish measures.
Oil and gas shares fell 1.4 percent, with a glut in supply following last week's Opec meeting pinning oil prices to 7 year lows. Every sector ended up in negative territory, with banks and autos down 2.6 and 2.3 percent respectively. "We've seen broad-based losses. There's no place to hide today. The shock announcement of Anglo's is at the epicentre, but this is a market which has been looking sick for some time," said Mike Ingram, market strategist at BGC Partners. "So much was hinging on the ECB coming up with the goods last week, but market expectations were such that it was doomed to disappoint, and we've been picking up the pieces ever since."
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