* FTSEurofirst 300 falls 0.6 pct to 1,108.58 points
* Euro STOXX 50 sheds 1.2 pct to 2,517.67 points
* Caution prevails ahead of U.S. election
* HSBC falls, Ryanair rises in heavy volume
By Sudip Kar-Gupta
LONDON, Nov 5 European shares fell on Monday, as
mounting provisions at HSBC hit banks while political
doubts in Greece also dented equities, with investors avoiding
taking large, new positions before the U.S. election.
The FTSEurofirst 300 index closed down 0.6 percent
at 1,108.58 points while the euro zone's blue-chip Euro STOXX 50
index declined by 1.2 percent to 2,517.67 points.
HSBC shed 1.3 percent, taking the most points off the
FTSEurofirst 300, after the British bank said a U.S. fine for
breaching anti-money laundering rules could cost it
significantly more than $1.5 billion.
HSBC's regulatory problems overshadowed higher underlying
profits at the company and knocked other financial stocks, with
the STOXX 600 European banking index falling 1.2 percent
to make it the worst-performing equity sector.
Traders added that uncertainty over a Greek vote on labour
reforms for the debt-ridden country was also impacting European
stocks. On Wednesday, Greece faces a knife-edge parliamentary
vote on the reforms, which have led to widespread protests.
"HSBC's results were okay, but the provisions in the U.S.
have knocked back the stock. Greece is also a bit of a concern -
it's one of those problems which never goes away," said MB
Capital trading director Marcus Bullus.
CAUTION PREVAILS AHEAD OF U.S. ELECTION
Trading volumes were below average as many investors
retreated to the sidelines ahead of the U.S. Presidential
election on Tuesday, with polls showing Republican challenger
Mitt Romney neck-and-neck with President Barack Obama.
Dealers expected European equities to make little progress
on Tuesday while the U.S. elections played out.
"It's been very rangebound and I expect there'll probably be
more of the same tomorrow," said Central Markets senior trader
However, one stock which experienced a surge in trading
volumes was Irish airline Ryanair.
Ryanair rose 5.8 percent to top the FTSEurofirst 300
leaderboard, with trading volumes around six times above the
usual 90-day average, after Ryanair raised its profit forecast.
Rival EasyJet also gained 1.1 percent.
"We've bought Ryanair and we've bought EasyJet," said
Germany's DAX index fell 0.5 percent to 7,326.47
points. MB Capital director Bullus said he would be tempted to
buy the DAX if it either broke out above the 7,400 point level
or fell to around the 7,200 level.
Invesco European product director Joel Copp-Barton added
that Invesco saw some "compelling" opportunities in European
stocks, including within the financials and infrastructure
The FTSEurofirst 300 index has fallen back from a 2012 high
of 1,122.76 points reached in mid-September.
However, it remains up by nearly 10 percent from late July,
when European Central Bank head Mario Draghi pledged fresh
measures to protect the euro currency from the region's
sovereign debt crisis.
"We do not expect the European economy to suddenly
accelerate overnight, but we believe that incremental progress
can be made in the more problematic countries over a period of
time," said Copp-Barton.