European shares fall after U.S. data 

European shares retreated from a one-year high in afternoon trade on Tuesday from a one-year high after data showed new construction of U.S. homes rose by less than expected in September. Skip related content

The U.S. Commerce Department said housing starts rose 0.5 percent to a seasonally adjusted annual rate of 590,000 units, below market expectations for 610,000. August's housing starts were revised down to 587,000 units from the previously reported 598,000 units.

Figures also showed that U.S. producer prices dropped an unexpected 0.6 percent in September, mainly due to a 2.4 percent decline in energy price.

At 1256 GMT (1:56 p.m. British time), the FTSEurofirst 300 index of top European shares was down 0.1 percent at 1,025.76 points after hitting a one-year high of 1,031 earlier in the session.

The index, which slumped 45 percent last year, is up 23 percent in 2009 and has surged 59 percent since hitting a record low in March this year.

Financial stocks were among top losers. HSBC , Barclays , Lloyds , Royal Bank of Scotland , BNP Paribas and Credit Agricole fell 0.2 to 4.7 percent.

"The housing numbers still look somewhat soft and that's a reflection of weakness in the consumer," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates.

Drugmakers also came under pressure. AstraZeneca , GlaxoSmithKline , Merck , Novartis , Roche Holding and Sanofi-Aventis fell 0.2 to 1.3 percent.

Across Europe, Britain's FTSE 100 index , Germany's DAX and France's CAC 40 fell 0.1-0.2 percent.