European shares fell on Wednesday, extending a retreat from multi-year highs reached last month, as fresh concerns about a possible tapering in U.S economic stimulus measures hit markets.

The pan-European FTSEurofirst 300 index, which touched a 5-year high of 1,258.09 points in late May, fell 0.4 percent to 1,206.45 points, while the euro zone's blue-chip Euro STOXX 50 index was down 0.5 percent at 2,745.16 points.

French supermarket retailer Carrefour was among the worst performers on the FTSEurofirst 300 index, falling 3.7 percent which traders attributed to HSBC's decision to cut its rating on the stock to "underweight" from "neutral".

Equity markets have retreated from May peaks over the last week on mounting concerns that the U.S. Federal Reserve may soon scale back economic stimulus measures that have helped to drive a global stock market rally this year.

Traders cited comments from Fed official Esther George, who said she supported slowing down the pace of bond purchases as the main reason for the latest stock market fall.

"The markets are hanging on every word of the central bankers in Europe and the U.S.," said Berkeley Futures associate director Richard Griffiths.

"Generally, the markets are looking to correct a bit more from here. The trend has turned lower. The rallies are being sold into, rather than people buying on the dip," he added.

Griffiths felt Germany's DAX, which was down by 0.2 percent to 8,276.31 points and had hit record highs of 8,557.86 points last month, could weaken further in coming sessions to fall below the 8,000 point mark.

He added that the Euro STOXX 50 could fall to 2,650 points by the end of next week, although technical traders pointed to a possible support level for the Euro STOXX 50 at around the 2,710 points level, which represents its 50-day simple moving average.

The FTSEurofirst 300 has risen some 6 percent since the start of 2013 while the Euro STOXX 50 has advanced by 4 percent, and Central Markets strategist Richard Perry said now could be a good time to trim equity holdings to book a profit on those gains.

"With ample profits still sitting on the table, as markets begin to slide, the temptation to lock in some profits will be growing," he said.

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