* FTSEurofirst 300 down 1.9 pct to lowest close since May 15
* Financials, oil & gas, basic resources leading losers
* Defensive telecom, pharma stocks gain; Vodafone up 3.7 pct
By Peter Starck
FRANKFURT, June 17 (Reuters) - European shares fell for the
fourth straight session on Wednesday amid doubts about a return
to economic growth, which hammered commodity stocks, and with
banks in the red on fresh concerns about U.S. financial sector
health.
The FTSEurofirst 300 <> index of top European shares
fell 1.9 percent to 845.76 points -- its lowest close since May
15 -- but remains up 1.7 percent year-to-date.
"We've seen a couple of weak days but no radical sell-off,"
said Commerzbank Chief Strategist Hans-Juergen Delp, who
attributed the downward move to a persistent discrepancy between
upbeat sentiment indicators and weak real economy data.
"The sentiment indicators have been positive but have not
been backed up by hard real economic data," he said.
"We need new impulses to kick off sustained gains but no
such impulses are in sight."
Banks <.SX7P> took the most points off the European
benchmark index.
Standard & Poor's lowered its ratings and revised its
outlooks on 22 U.S. banks.
"Operating conditions for the industry will become less
favorable ... characterized by greater volatility in financial
markets during credit cycles, and tighter regulatory
supervision," S&P said, adding the changes also reflected an
ongoing broad-ranging reassessment of industry risk for U.S.
financial institutions. [] []
In Europe, Allied Irish Banks <ALBK.I> tumbled 17 percent,
Dexia <DEXI.BR> lost 6.8 percent, Deutsche Bank <DBKGn.DE> and
Credit Suisse <CSGN.VX> both fell 4 percent, and UBS <UBSN.VX>
dropped 3.9 percent.
DEMAND WORRIES
London copper <MCU3> fell to a near two-week low as doubts
about the global economic recovery renewed worries over metals
demand. []
Among miners, Xstrata <XTA.L> plunged 10.2 percent, Rio
Tinto <RIO.L> lost 7.8 percent, Anglo American <AAL.L> fell 6.3
percent and BHP Billiton <BLT.L> was down 3.9 percent.
Steelmakers also suffered, notably ArcelorMittal <ISPA.AS>,
which dropped 6.4 percent to its lowest close in three weeks.
Softer oil prices [] hit energy stocks, with
Repsol <REP.MC> down 3.2 percent, BP <BP.L> down 2.4 percent and
Total <TOTF.PA> down 2.2 percent.
Economic data on Wednesday showed the euro zone's unadjusted
exports fell 27 percent year-on-year in April and imports
dropped 28 percent. []
Bank of England policymakers acknowledged recent data on
Britain's economy had been encouraging but stuck with gloomy
projections published in May, minutes to this month's policy
meeting showed. []
The Swiss State Secretariat for Economic Affairs lowered its
forecast for the domestic economy to contraction of 2.7 percent
this year and 0.4 percent in 2010, suggesting a deeper and
longer recession than so far anticipated. []
U.S. package delivery company FedEx Corp <FDX.N> gave an
outlook well below Wall Street estimates, saying the next two
quarters would be "extremely difficult" although there were
signs that the pace of economic decline had slowed.
[]
"The bulls have lost their swagger and after a week long
stalemate, the bears appear to be winning (the) recovery debate.
Financial markets have now broken out of last week's unusually
tight trading range," BetOnMarkets.com said in a note.
TRIPLE-WITCHING
Some analysts have said the so-called triple witching -- the
simultaneous expiry of stock index futures, stock index options
and single stock options -- on June 19 could be playing a role.
Technical analysts, or chartists, at UniCredit, said that
impact may have run its course by now.
"In the last five quarters, expiration effects already
occurred at the beginning of the week ... we expect most of the
expected pressure already to have happened," they said in an
equity strategy note.
"The market is clearly missing some real inspiration,"
UniCredit said, citing turnover on the New York Stock Exchange,
the trend of which European equity markets tends to follow.
The day's European gainers were mainly in traditional
defensive sectors such as telecommunications <.SXKP> and
healthcare <.SXDP>. In telecommunications, Vodafone <VOD.L>
added 3.7 percent, Deutsche Telekom <DTEGn.DE> put on 2.1
percent and France Telecom <FTE.PA> rose 1.6 percent.
Among healthcare stocks, AstraZeneca <AZN.L> was up 2.5
percent and Sanofi Aventis <SASY.PA> rose 1.5 percent.
It was thin on the corporate news front, but some companies
made waves.
Sainsbury <SBRY.L> fell 5.7 percent after Britain's
third-biggest grocer said it would raise about $700 million to
accelerate its expansion. []
"The market isn't buying the capital raising and expansion
plans," ETX Capital said in a note.
"Analysts are concerned that the UK grocery market is
developing into a `barbell' shape, with giant Tesco <TSCO.L> at
one end and low-cost retailers like Morrison's <MRW.L> and Asda
(part of U.S. WalMart <WMT.N>) at the other. Sainsbury's, in
this analysis, looks uncomfortably stuck in the middle," ETX
Capital said.
Shares in K+S <SDFG.DE> fell 14 percent after the German
fertiliser and salt maker warned of a bigger drop in earnings
and sales this year than previously forecast, as farmers
continue to hold off on potash orders. []
(Additional reporting by Blaise Robinson in Paris; editing by
Karen Foster)
