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Paris - European shares fell in early trading on Wednesday, reversing part of the previous day's tentative bounce and hurt by another drop in oil prices as well as by Russia's brewing financial crisis.
The Russian rouble remained volatile on Wednesday despite foreign currency sales by the finance ministry.
The currency is still down almost 50% against the dollar this year. The slump has revived memories of the 1998 crisis when the currency collapsed and sparked a sell-off in European equities with Germany's DAX plunging nearly 40% in two-and-a-half months.
"The attack this week on the rouble has been quite violent, and the market is now pricing in a recession in Russia next year," said Arnaud Scarpaci, fund manager at Montaigne Capital.
READ:Rouble claws back some losses
"A lot of European companies exposed to Russia are under pressure. It's better to avoid names such as Metro, Nokian and Societe Generale, at least until things stabilise in Russia."
Shares in Raiffeisen Bank International, which relies heavily on the Russian market for profits, has fallen 53 percent so far this year, and hit another record low on Wednesday, falling 2.9%.
Danish brewer Carlsberg and Finnish tyre maker Nokian, which both have a strong exposure to Russia, are down 24% and 44% respectively in 2015.
At 11:08, the FTSEurofirst 300 index of top European shares was down 0.8% at 1 305.29 points.
Brent futures fell more than 1%, down for a sixth straight session, with persistent worries of a supply glut keeping prices near a five-and-a-half year low below $60 a barrel.
Total was down 0.8% on Wednesday, Saipem was 2.8% lower and BP was down 0.5%.
Crude prices have dropped nearly 50% since June, forcing a number of European oil services companies including Seadrill and Fugro to scrap dividends as oil majors accelerated cost-cutting.
The STOXX energy sector index has fallen 30% in the past six months.
The relentless drop in oil prices has also fuelled fears of deflation in the eurozone, bolstering expectations the European Central Bank will start buying sovereign bonds next year in a bid to revive inflation and support the euro zone economy.
Eurozone inflation is now at 0.3%, far below the bank's target of just below 2%.
