European shares fall back as financials weakness offsets eyewear rally

European shares fell on Monday as losses among financial stocks more than offset a rally in eyewear-makers Luxottica and Essilor after the two agreed a 46-billion-euro merger.
The pan European STOXX index was down 0.6 percent, giving back gains seen in the previous session, while a slump in the pound helped the FTSE hit a new record high in choppy trade after a record of 14 sessions of gains in a row.
Luxottica and Essilor rose 8 and 13 percent respectively, topping gainers on the STOXX index.
The combined Italian-French group will create a global powerhouse in the eyewear industry with annual revenue of more than 15 billion euros and hundreds of millions in savings.
"It looks like a marriage made in heaven. You have the largest manufacturer merging with the largest retailer," said Roberto Magnatantini, head of global equities at Geneva-based SYZ Asset Management, which owns shares in both companies.
Elsewere in the fashion sector, Hugo Boss rose 8 percent after saying 2016 profits would fall by less than it feared due to a recovery in China and in Britain, while fast-fashion retailer H&M fell 3.5 percent after December sales growth missed expectations.
While all sectors except miners and healthcare were moving in negative territory, banks and insurers were the biggest weight, taking the most points off from the pan-European index.
The European banking index fell 1.5 percent, giving up gains seen in the previous session. Italian banks were among the biggest losers after rating agency DBRS cut Italy's credit rating on Friday in a move which could raise their borrowing costs.
Italy's Banco BPM and UniCredit fell more than 2 percent, while UK's Royal Bank of Scotland and Spain's Banco Popular were also down by more than 3 percent.
German car-makers BMW, Daimler and Volkswagen fell between 1.5 nd 2 percent after US President-elect Donald Trump warned he will impose a border tax of 35 percent on vehicles imported from abroad to the US market.
Basic resources stocks were flat, helped by gains among London-listed precious metal miners such as Centamin and Randgold which were buoyed by stronger gold prices, which benefited from safe-haven demand due to uncertainty over President-elect Donald Trump's policies.