LONDON - EUROPEAN shares fell early on Wednesday, led down by banks and snapping six straight sessions of gains, as the spotlight moved back on to the economy after Barack Obama's decisive win in the US presidential election.

At 0821 GMT (4.21pm Singapore time) the pan-European FTSEurofirst 300 index was 1.3 per cent lower 961.32 points.

European stocks ended the previous session up 4.3 per cent at 974.15 points, hitting a one-month closing high.

Battered banks were the heaviest weight on the index. BNP Paribas shed 2.6 per cent after saying its third-quarter net profit more than halved due to higher provisions tied to the financial crisis.

HSBC lost 2.9 per cent and BBVA was 1.3 per cent lower.

In Asia, Japan's Nikkei rose 4.5 per cent. Major US stock indexes rose between about 3 and 4 per cent in the biggest Election Day rally ever on Tuesday.

Analysts said that an Obama win had been largely priced in after six days of gains for European shares.

'In the last (few) days we have seen quite significant gains, a breather is nothing surprising. I would not attribute it to any special event', said Mr Tammo Greetfeld, equity analyst at UniCredit in Munich in Germany.

The new Obama administration, which takes office in January, will face the world's worst financial crisis since the Great Depression, and a potentially steep slowdown in the global economy that has pounded markets from Tokyo to Frankfurt to New York.

'The fact that (Obama) has now been elected, I think it will be positive for equities going forward, as his key message has been change', said Mr Greetfeld. -- REUTERS