European shares closed lower on Wednesday, extending a losing streak to three days, after U.S. President Obama's plan to stem foreclosures met with scepticism as fears of a deepening recession weighed, according to Reuters. The pan-European FTSEurofirst 300 index of top shares was down 0.3 percent at 763.36 points at provisional close in a volatile session, having been up as much as 770.14 points and low as 750.88 points. U.S. President Barack Obama unveiled his much-anticipated plan to fight the U.S. housing crisis, and pledged up to $275 billion to help stem a wave of foreclosures sweeping the country. "It's another one of these things where just a huge sum of money is being thrown at various sectors of the economy," said Mike Lenhoff, a strategist at Brewin Dolphin. "We do not really know how effective the whole thing will be. Though it should prevent a bad situation from degenerating into something worse," Lenhoff said. The banking sector was the biggest gainer on the index, recovering from falls on Tuesday that were sparked by worries over exposure to emerging European countries. Societe Generale gained 2.7 percent. The group said it would reorganise its investment banking arm, after posting a 2008 loss in the unit, albeit a smaller one than most of its rivals. HSBC, Banco Santander, and BNP Paribas were up between 1.9 percent and 2.6 percent. Royal Bank of Scotland lost 12.6 percent on capital raising fears. Energy stocks took the most off the index as crude touched just below $35 a barrel.BP, which was trading ex dividend, was down 3 percent BG Group, Galp Energia and Tullow Oil slipped 1.4-1.7 percent. French aerospace group Safran lost 11.5 percent. The group forecasted flat sales and a further operating margin drop this year as it wrestles with a decline in the aircraft industry and currency hits. Drugmakers were also big sectoral risers on the index as investors took a defensive stance. GlaxoSmithKline, AstraZeneca and Roche were up 0.2 percent to 1.3 percent. Brewers Heineken and Carlsberg gained 2.3 percent and 2.5 percent, respectively. The groups, which bought Scottish & Newcastle, last year said they are committed to slashing debt, costs and spending in anticipation of a recession-hit 2009. In economic news, data showed that U.S. housing starts and building permits dropped to record lows in January, as builders shelved construction plans to try to clear a glut of unsold houses caused by a slump in demand. U.S. industrial production shrank more than expected in January, while the amount of manufacturing capacity being tapped hit its lowest level on record. Across Europe, the FTSE 100 index was down 0.7 percent, Germany's DAX was 0.3 percent lower and France's CAC 40 was down 0.04 percent.
