European stocks fell in early trading on Thursday after the US Federal Reserve took an upbeat view on the U.S. economy and signalled that it remains firmly on track to raise interest rates this year.
Vallourec featured among the top losers, falling 6 per cent after the steel pipes maker warned of an impairment charge of €11.0-1.2 billion on the value of its assets, blaming turmoil in the oil market.
"It will translate into a big net loss in 2014 and will deteriorate Vallourec's gearing. Also, Vallourec has not impaired anything in the US, whereas market conditions (there) are deteriorating rapidly as well," a Paris-based trader said.
Bucking the trend, shares in Austrian lender Raiffeisen Bank International gained 11 per cent, bouncing from recent sharp losses, after the bank said it is planning to extend its capital buffer with a reduction of risk-weighted assets (RWA) of at least 20 per cent, which will also affect its Russian business.
At 0852 GMT, the FTSEurofirst 300 index of top European shares was down 0.6 per cent at 1,465.61 points.
The Fed said the US economy was expanding "at a solid pace" with strong job gains. It repeated it would be "patient" in deciding when to raise benchmark borrowing costs from zero, though it also acknowledged a decline in certain inflation measures.
The statement took investors by surprise, sparking a sell-off on Wall Street with the Dow Jones industrial average falling 1.1 per cent, the S&P 500 dropping 1.4 per cent and the Nasdaq Composite losing 0.9 per cent.
"The bullish tone by the Fed on the economy caught investors off-guard," said John Plassard, senior equity sales trader at Mirabaud Securities in Geneva.
"Meanwhile, investors are fretting about Greece again, and it could go on for a while. What happened yesterday, with Athens's bourse losing 9 per cent, is spooking investors. That said, it's too early to draw conclusions about the new government."
Around Europe, UK's FTSE 100 index was down 0.9 per cent, Germany's DAX index down 0.7 per cent, and France's CAC 40 down 0.6 per cent.
Greek banking shares rebounded on Thursday to recover some ground after having fallen to record lows in the previous session. The Athens Stock Exchange FTSE Banks Index , which had slumped 27.7 per cent on Wednesday, rose 7.9 per cent, with National Bank of Greece up 6.7 per cent, while Alpha Bank was up 11.8 per cent.
Athens' broader ATG benchmark equity index was up 1 per cent, clawing back some ground after falling 9.2 per cent on Wednesday.
Greek financial markets had been hit on Wednesday after leftist Greek Prime Minister Alexis Tsipras threw down an open challenge to international creditors by halting privatisation plans agreed under the country's bailout deal.