European shares fall as banks see profit-taking after ECB tests
* FTSEurofirst 300 down 0.8 pct, trims last week's gains
* Investors book profits on banking shares after ECB tests
* Morgan Stanley strategists remain 'overweight banks'
By Blaise Robinson and Sudip Kar-Gupta
PARIS/LONDON, Oct 27 (Reuters) - European stocks fell on Monday, as investors booked the gains they made after the European Central Bank's review of the region's banks and an index of German business sentiment dropped to its lowest in almost two years.
Following an early rally, most euro zone banking stocks turned negative as traders took profits after. The sector had risen 14 percent since mid-October in the run-up to the results of the ECB review.
"I think it's a case of 'buy the rumour and sell the fact'," said Terry Torrison, managing director at Monaco-based McLaren Securities.
"We had a decent run-up ahead of the stress-test results, but everyone was jumping on the bandwagon and ramping things up this morning without any clear reason, given that the results of the stress test were in line with market expectations."
Among the few gainers, shares in Austria's Erste Group Bank added 4.5 percent and Raiffeisen Bank International rose 2.9 percent. Both banks passed the tests. Continuación...