LONDON (ShareCast) - Banks are leading European shares lower in early dealings after sentiment was knocked by fresh concerns over the health of US mortgage giants Fannie Mae and Freddie Mac.

Societe Generale, Banco Santander and BNP Paribas are among the worst performers in the sector.

The German Dax is 92 points lower at 6,340, the French CAC dropped 75 points to 4,373, while the Swiss market fell 72 points to 7,159.

Ciba Specialty Chemicals is sharply lower after the Basel-based plastics firm reported a net loss of 606m Swiss francs in the second quarter compared with a profit of 27m franc last year.

“The half year results were unquestionably disappointing. We experienced intense margin pressure from the escalation of raw material and energy costs, which went up 10 percent in the second quarter alone, with the heaviest impact in April and May,” said chief executive Brendan Cummins.

Wienerberger warned that full year operating earnings before interest, tax, depreciation and amortization will drop by 15% this year as the brickmaker reported a 30% drop in first half net profit to €98.6m.

The group also said that it intends to mothball or shut down 25 of its plants.

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