European shares slipped on Thursday, with banks pressured by ongoing capital worries and mirroring weak US lenders, after a mortgage industry probe raised fresh concerns about the sector's recovery. The pan-European FTSEurofirst 300 index of top shares closed 0.2 percent lower at 1,084.67 points in a choppy session, after earlier trading at a five-month intraday high of 1,094.13 points.
Banks were weak after Standard Chartered's launch of a $5.3 billion rights issue to shore up its finances sparked concerns other lenders would have to follow suit to meet fresh capital requirements. Barclays, Societe Generale and BNP Paribas fell 3.1 to 4.1 percent.
The sector was also weighed down by falls in US lenders after all 50 US states launched a joint investigation of the mortgage industry - a move that could threaten the recovery of the housing market.
"There is news out of the US on investigations into home foreclosures. That's causing some uncertainty for the banks," a London-based trader said. Further losses were limited as heavyweight mining shares pushed higher, with the STOXX Europe 600 basic resources index up 0.9 percent, boosted by firm metals prices as the dollar continued to weaken on expectations the US Federal Reserve would increase asset purchases to bolster the recovery.
The technical picture signalled a bullish trend as the blue chip Euro STOXX 50 stayed above a key resistance of 2,740.32, its 61.8 percent retracement of an April high to a May low for the second day in a row. Across Europe, Britain's FTSE 100 and France's CAC 40 fell 0.4 and 0.2 percent, respectively, while Germany's DAX rose 0.3 percent.
Investors are likely to look to further corporate earnings in the United States for direction, with Google reporting quarterly figures after US markets closed on Thursday and General Electric releasing figures on Friday. Among individual movers, Actelion rose 6.6 percent on renewed market talk the Swiss biotech group could be the next bid target in the pharmaceuticals sector.
Heavyweight Vodafone rose 1.6 percent following an upgrade from Nomura, which cited strong costs reduction. On the downside, Belgian supermarket group Delhaize fell 4.7 percent after a downbeat note by brokers Deutsche Bank, which cut the firm's target price.