* FTSEurofirst 300 index falls 1.4 percent
* Miners track weak metal prices; oils under pressure
* Investors await U.S. payrolls data
By Atul Prakash
LONDON, Dec 5 (Reuters) - European stocks retreated on Friday, as miners
tracked weaker metal prices and the prospect of a deep economic downturn and
deteriorating corporate outlook kept investors on edge ahead of U.S. jobs data.
At 0928 GMT, the FTSEurofirst 300 index of top European shares was down 1.4
percent at 814.64 points. The benchmark has lost more than 45 percent so far
this year.
Miners were under pressure because of a 4 percent fall in copper prices and
a 2 percent drop in aluminium prices. BHP Billiton, Anglo American, Vedanta
Resources, Lonmin, Kazakhmys, Xstrata and Antofagasta fell 0.2-8.8 percent.
Oil shares took the most points off the index, as crude traded around $44 a
barrel, its lowest level in about four years, with eyes on the psychologically
important $40 level as a widening economic slowdown gnawed into oil demand.
BP, Royal Dutch Shell, gas producer BG Group and Tullow Oil shed between 3.7
and 5.3 percent.
Banks were also weaker, with Credit Suisse falling 5.6 percent, Royal Bank
of Scotland down 4 percent, HBOS down 2 percent and UBS dropping 1 percent.
"The markets are trying to evaluate how deep, how long and how extended the
contraction and consumer demand would be," said Jonathan Lawlor, head of
research firm Fox-Pitt, Kelton.
"And consumers will only start borrowing, purchasing and basically driving
the economy when they are more comfortable in their job security, for example,"
he added.
Companies such as Swiss bank Credit Suisse, U.S. phone company AT&T Inc and
Japanese brokerage Nomura Holdings Inc are cutting their workforce by thousands,
bracing for a long and hard global recession.
Central banks throughout Europe and Asia have slashed rates aggressively
this week, with other radical actions expected, as policymakers raced to
stabilise financial markets and stop deflationary forces from getting further
out of control.
But overnight deposits at the European Central Bank rose, as banks continued
to stash their cash at the central bank rather than lend it on in interbank
markets.
RADICAL PLANS?
The Bank of England was working on radical plans to inject cash directly
into the British economy as a last resort to reverse a slide into recession, the
Daily Telegraph said.
The unsourced report came after the Bank of England on Thursday slashed
interest rates to their lowest level since 1951 and indicated that more needed
to be done to prevent a credit squeeze tipping Britain's economy into a
prolonged recession.
"It would appear that investors have decided that it is safer to take their
profits off the table and re-evaluate things after today's non-farm payroll
figures," said Chris Hossain, senior sales manager at ODL Securities.
"This data will likely determine the direction for the next few trading
sessions," he added.
U.S. non-farm payrolls data for November are due at 1330 GMT. Economists in
a Reuters survey forecast 340,000 jobs were lost in the month compared with a
loss of 240,000 jobs in October.
Wall Street fell overnight, with the major indexes dropping 2.5-3.1 percent,
as a sharp drop in crude sent the energy sector tumbling and disappointing
profit outlooks from large companies such as Merck raised the spectre of a
worsening economy.
European planemaker Airbus, owned by EADS, needed a capital increase of over
2 billion euros ($2.5 billion) that would be accompanied by a simplification of
the company's legal structure, an Airbus spokesman said. EADS fell 4.7 percent.
Across Europe, the FTSE 100 index was 0.8 percent down, Germany's DAX fell 2
percent and France's CAC 40 was 2.2 percent lower.
(Reporting by Atul Prakash; Editing by Hans Peters)
