LONDON, March 9 (Reuters) - European shares fell in early trade on Monday, with a key stock benchmark hitting its lowest since September 1996, as banks slipped after the UK government increased its stake in Lloyds Banking Group (LLOY.L).
By 0825 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was down 1.1 percent at 655.06 points, while the broader STOXX 600 .STOXX was down 1.15 percent at 157.69 points, hitting its lowest level since September 1996.
Banks were major losers. Lloyds fell 14 percent after it said over the weekend that Britain would get a stake of up to 77 percent in the bank after agreeing to underwrite 260 billion pounds of risky assets.
"With Lloyds the issue is the government has ownership but not control, so it does not resolve the underlying problem. The government really can not push through policy and it is possible this could be a step towards full nationalisation or suspension of shares as per Northern Rock," said Justin Urquhart Stewart, director at Seven Investment Management.
http://www.reuters.com/article/eurMktRpt/idUSL920539620090309