* FTSEurofirst 300 falls 0.5 percent
* Banks, insurers slip on financial market troubles
* Energy, mining stocks gain on higher commodity prices
By Atul Prakash
LONDON, Aug 27 (Reuters) - European shares fell early on
Wednesday as a decline in financial stocks on persistent worries
about the health of the sector negated the impact of a rise in
oil and mining shares that gained on higher commodity prices.
At 0834 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.5 percent at 1,165.80 points. The
index gained 0.2 percent in the previous session.
Banks were the top weighted sectoral loser on the index, as
investors remained jittery about the sector, which has been
worst hit by a credit crisis stemming from a collapse in risky
U.S. mortgages.
A report from the Federal Deposit Insurance Corporation said
on Tuesday that 117 U.S. banks were on its troubled banks list
at the end of the second quarter, up from 90 after the first
three months of the year. []
"It's a difficult environment for the banking sector," said
Henk Potts, equity strategist at Barclays Stockbrokers.
"Financials have been under pressure due to concerns about
the speed of the economic slowdown and worries that there is
still further fallout from the subprime credit crunch issues."
Natixis <CNAT.PA> slipped more than 5 percent, Sweden's
Swedbank <SWEDa.ST> shed 3.6 percent, Italian bank UBI Banca
<UBI.MI> fell nearly 3 percent and UBS AG <UBSN.VX> declined 2.4
percent.
Insurers were also under pressure, with Swiss Life <SLHN.VX>
falling 2.5 percent, Aegon <AEGN.AS> dropping 1.9 percent, Old
Mutual <OML.L> shedding 1.6 percent and Prudential <PRU.L>
falling 1.5 percent.
Swiss insurer Baloise <BALN.VX> fell 5.6 percent after it
posted a worse-than-expected 42 percent drop in first-half net
profit due to losses on investments and said it expected
financial markets to remain volatile this year.
Across Europe, Britain's FTSE 100 <> fell 0.18 percent,
Germany's DAX <> was down 0.73 percent and France's CAC 40
<> eased 0.67 percent.
OILS TRACK CRUDE PRICES
But oil and energy stocks gained, tracking a rise in crude
prices that rose for a third straight session to near $117 a
barrel on growing fears over Tropical Storm Gustav, heading
towards oil and natural gas installations in the Gulf of Mexico.
Tullow Oil <TLW.L>, BP <BP.L>, BG Group <BG.L> and Total
<TOTF.PA> rose between 0.2 and 1.5 percent.
Miners also rose with an increase in metal prices. Vedanta
<VED.L> was up 1.3 percent, Anglo American <AAL.L> added 0.8
percent and BHP Billiton <BLT.L> was up 0.4 percent.
London-listed Chilean miner Antofagasta <ANTO.L> rose 1.3
percent after posting an 8.8 percent rise in first-half earnings
per share as higher copper output and prices outweighed rising
costs.
Among individual shares, Dutch brewer Heineken NV <HEIN.AS>
rose 2.3 percent after it posted first-half operating profit up
7.4 percent to 925 million euros ($1.36 billion), missing
forecasts, but it said it had achieved higher pricing in most
markets and cut costs.
But world number two truck maker Volvo <VOLVb.ST> fell 2.6
percent. It said deliveries of its trucks rose 2 percent
year-on-year in July as strength in Asia offset weakness on both
sides of the Atlantic.
Investors awaited U.S. durable goods data, due at 1230 GMT,
for near-term market direction.
(Editing by David Cowell)
