European equities edged lower on Thursday in spite of a rally by oil stocks as jitters about a global recession put banking shares under pressure and uncertainty about the passage of a US bail-out dented carmakers.

The FTSE Eurofirst 300 index of top European shares slid 0.7 per cent to 853.81, snapping a three-session winning streak. In Germany the Xetra Dax lost 0.8 per cent to 4,767.20 while in Paris the CAC 40 retreated 0.4 per cent to 3,306.13.