Eurostoxx 50: 2,315.89 (-39.59) Franffurt DAX: 5,859.43 (-107.77) Paris CAC: 3,166.06 (-51.83):EUROPEAN SHARES closed lower yesterday after German finance minister Wolfgang Schaeüble said it was unrealistic to expect a definitive solution to the euro zone debt crisis at an EU summit this weekend.

The pan-European FTSEurofirst 300 index of top shares fell 1 per cent to 966.04 points.

Trading volume was 85 per cent of the indexs 30-day average.

The index, down more than 13 percent in 2011 on worries about the euro zone debt crisis and weak global growth, hit a 10-week high earlier in the session, having been boosted in recent weeks on optimism that policymakers were acting to tackle the crisis.

It turned negative after Schaeubles remarks.

Theres a bit of a reality check going on here. European politicians like to make grandiose statements, about supporting the euro and containing the crisis, said Daniel McCormack, strategist at Macquarie.

But now theres a realisation the detail is a bit more complicated and the solution may not satisfy markets.

Heavyweight banks were among the biggest fallers, with the Stoxx Europe 600 Banking Index down 1.6 percent, with Italys UniCredit falling 6.1 per cent, though it is still up nearly 40percent from a low it hit last month.

Banks have gained sharply in recent weeks on confidence that governments would help in recapitalising them. Theres optimism on bank recapitalisation, but not so much on cutting sovereign debt, McCormack said.

Greek banks fell 7.3 per cent, with Schaeuble remarking that there may be a need to further restructure Greeces public debt, and for the country to undertake fiscal and structural reform.

The benchmark index fell further away from 981.9, the 38.2 per cent Fibonacci retracement level of its fall from a 2011 high hit in February to a low in September.

The next support level, on this line, is the 23.6 per cent retracement at 932.7.

Some stocks continue to look cheap, though strategists said the wider macroeconomic environment was prompting caution.

Equity valuations on Thomson Reuters Datastream showed the Stoxx Europe 600 carrying a one-year forward price-to-earnings of 8.3 against a 10-year average of 13.2. – (Reuters)