European equities fell for a fifth consecutive session after the continent’s banks were pummelled and new year optimism was further deflated by bleak earnings forecasts.

The benchmark FTSE Eurofirst 300 index at one point entered negative territory for 2009 but rebounded to close 1 per cent higher for the year, in spite of ending down 1.5 per cent at 840.36 on the day. Germany’s Xetra Dax fell 1.7 per cent to 4,636.94, and France’s CAC 40 shed 1.5 per cent to 3,197.89.