Euro shares down as debt discord deepens

European shares fell yesterday in a choppy session, reversing earlier gains, with banks exposed to the eurozone peripheral among the worst performers as political discord around the handling of the regional debt crisis grew.

There were doubts about Italy and Greece's willingness to push through austerity measures as resistance grew in the countries against their implementation, while paymaster Germany started to take a hardening opposition to further aid.

The worries about the eurozone peripheral debt concerns grew after news that the German Finance Minister Wolfgang Schaeuble had said Greece may not receive another aid tranche if the delayed "troika" report was not positive.

Adding to the concerns earlier had been a rise in Italian 10-year yields on worries about the implementation of austerity cuts which are vital to keep European Central Bank support, although they had since fallen back.

Concerns about European political unity needed to contain the eurozone peripheral debt crisis had been shaken in the previous session after German Chancellor Angela Merkel's coalition lost ground in a state election on Sunday.

Compounding the worries about political unity in the region was nervousness about a German court ruling today about Berlin's involvement in the region's bailout fund.

Trade was choppy with the FTSEurofirst 300 having been up as much as 922.08 and down as low as 899.90 points.

The index had earlier been higher, with Swiss stocks flooding the best performers list after the Swiss National Bank said it would set a minimum exchange rate target of 1.20 francs to the euro. A stronger Swiss franc had posed a risk to the economy and had been hurting exporting stocks.

"Statements from SNB were pretty bold and should ease Swiss franc strength at least for the next weeks," Switzerland-based hedge fund manager Trung-Tin Nguyen at TTN AG said.