* FTSEurofirst 300 index ends down 1.3 pct
* Commods lower as crude, metal prices retreat
* U.S. ADP Employment weighs on sentiment
By Joanne Frearson
LONDON, Jan 7 (Reuters) - European shares snapped a six-day
winning streak on Wednesday, hit by weak U.S. employment data
and commodity stocks suffering from lower crude and metal
prices.
The pan-European FTSEurofirst 300 <> index of top
European shares closed 1.3 percent down at 877.85 points after
falling as low as 871.92.
David Buik, partner at BGC Partners, said markets had been
too frothy in recent days "and have been ahead of themselves."
He added that the suicide of German tycoon Adolf Merckle
lent weight to perceptions about the depth of the credit crisis
and the damage it has done to the Germany economy.
"Most important has been the dreadful U.S. ADP employment
data and the fall in U.S. mortgage applications. This has been a
wake-up call for the European markets. Sentiment has changed and
profit takers have come in," Buik added.
U.S. private employers shed 693,000 jobs in December, up
sharply from the revised 476,000 jobs lost in November and far
more than economists estimated, a report by a private employment
service said. []
"The economy continues to deteriorate at a rapid rate and
there is no end in sight. We don't see any bottom with any of
the indicators," said Robert MacIntosh, chief economist at Eaton
Vance Corp.
The U.S. Mortgage Bankers Association said its seasonally
adjusted index of mortgage application activity fell to its
lowest reading since December 2000. []
Energy stocks were the biggest losers as crude <CLc1> fell
back 6.7 percent. Oil major BP <BP.L> lost 5.55 percent, dogged
by rumours it had told analysts earning would be lower than
expected. BP denied the rumours. []
BG Group <BG.L>, Royal Dutch Shell <RDSb.L> and Total
<TOTF.PA> were down between 3.7-4.7 percent.
Miners retreated along with metal prices. Copper <MCU3=LX>
lost 3.2 percent and U.S. gold futures <GCG9> dropped over 3
percent as news of a worsening global job market hurt bullion's
appeal as a hedge against inflation.
Anglo American <AAL.L>, BHP Billiton <BLT.L>, Eurasian
Natural Resources <ENRC.L> and Rio Tinto <RIO.L> were down 4.4-6
percent.
In the gas, water and utility sector, Scottish & Southern
<SSE.L> was down 8.2 percent after the group said it had raised
479 million pounds from a share placing to help fund
acquisitions and investments. []
Germany's largest utility E.ON <EONGn.DE> and its peer RWE
<RWEG.DE> fell back 3.4 percent and 2.1 percent respectively on
concerns lower oil prices will hit the companies' profits.
Traders said stocks have also been pressured by news that
Russian gas flows to Europe through Ukraine have been shut down
completely, reducing power to industries and homes in south-east
Europe and disrupting supplies to major economies.
[]
Among financials, Royal Bank of Scotland <RBS.L> and UBS
<UBSN.VX> were down 3.9 percent and 1.5 percent respectively.
The groups confirmed they had some exposure to chemicals company
LyondellBasell [], whose U.S. unit filed for
bankruptcy. []
Commerzbank <CBKG.DE> lost 4.8 percent as JP Morgan resumed
coverage on the group with an "underweight" rating and UBS cut
its price target to 7 euros from 9.5 euros.
Automobiles and defensives bucked the trend.
BMW <BMWG.DE>, Peugeot <PEUP.PA> and Renault <RENA.PA> were
up 1.2-3.7 percent while food and drug retailers also gained.
Tesco <TSCO.L> and Delhaize Group <DELB.BR> were 1.4 percent and
1.7 percent higher, respectively.
Across Europe, the FTSE 100 <> index was down 2.8
percent, Germany's DAX <> was 1.8 percent lower and
France's CAC 40 <> shed 1.5 percent.
(Editing by David Cowell)
(joanne.frearson@thomsonreuters.com; +44 207 542 2773,
Reuters Messaging:joanne.frearson.thomsonreuters.com@reuters.net)
