LONDON (ShareCast) - Europe’s main markets have retreated further by midday following renewed worries that financial firms could report more credit crunch-related losses.

Banks are leading European shares lower with Societe Generale, Banco Santander and BNP Paribas all among the worst performers in the sector.

Shares in Deutsche Postbank dropped after rumours that there are no buyers in sight for Germany's biggest retail lender.

The German Dax is 111 points lower at 6,320, the French CAC dropped 79 points to 4,369, while the Swiss market fell 95 points to 7,136.

Basel-based plastics firm Ciba Specialty Chemicals 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.

Total and Royal Dutch Shell dropped after the price for crude oil fell back to around $112 a barrel.

In economic news, the ZEW Indicator of Economic Sentiment for Germany stood at -55.5 in August compared to a record low of -63.9 in the previous month.

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