* FTSEurofirst 300 index falls 0.7 percent
* Banks slip on concerns about deepening economic slowdown
* Commodities shares rise as crude jumps, metals gain
By Atul Prakash
LONDON, Dec 11 (Reuters) - European shares ended lower on
Thursday, snapping a three-day winning streak, as banking
stocks, weakened by mounting concerns about a deep recession,
outweighed positive energy stocks that tracked stronger crude
prices.
The FTSEurofirst 300 <> index of top European shares
closed 0.7 percent lower at 853.81 points. It has lost more than
43 percent this year, battered by the credit crisis, which has
helped push several major economies into recession.
"There is still too much uncertainty. It's too early to say,
but we may be finding a bottom here. If we get some stability,
that would be nice," said Edmund Shing, strategist at BNP
Paribas, in Paris.
"People are looking for direction. The good news is that the
market is not going down on the back of bad economic news."
Banks took most points off the index, with HBOS <HBOS.L>
falling 2.6 percent, Royal Bank of Scotland <RBS.L> down 3.5
percent, Lloyds TSB <LLOY.L> falling 5.5 percent and Commerzbank
<CBKG.DE> down 2.4 percent.
But some analysts said the market remained cautious as poor
economic data continued to pour in.
The number of U.S. workers filing new claims for jobless
benefits surged to a 26-year high last week as employers
tightened their belts to help weather what many fear will be a
long and deep recession. []
Separate reports showed the U.S. trade deficit swelled
unexpectedly in October as weak economies around the world
imported less from the United States, while U.S. import prices
registered a record decline last month.
The outlook for Britain's economy darkened with news of a
sharp contraction in manufacturing and construction orders,
plunging price expectations and dire warnings from retailers
pointing to a long and painful recession ahead.[]
Across Europe, the FTSE 100 <> index was up 0.5
percent, the German DAX <> index was down 0.8 percent and
France's CAC <> index was down 0.4 percent.
OILS SURGE, MINERS ADVANCE
Energy shares rallied with a 10 percent jump in crude after
the International Energy Agency predicted global growth in crude
demand would resume in 2009. BP <BP.L>, BG Group <BG.L>, Royal
Dutch Shell <RDSb.L> and Tullow Oil <TLW.L> rose 2.7-20 percent.
Miners were mixed, with Lonmin <LMI.L>, Kazakhmys <KAZ.L>
and Xstrata <XTA.L> rising 1.2-7.5 percent. But BHP Billiton
<BLT.L>, Anglo American <AAL.L>, Vedanta Resources <VED.L>,
Antofagasta <ANTO.L> and Rio Tinto <RIO.L> fell 0.1-4.1 percent.
"The commodities sectors are making sense, from the point of
view of valuations, with miners down to four times (earnings)
and oils down to six," said Philip Isherwood, strategist at
Dresdner Kleinwort.
"The problem with the policy initiatives is that the
response is proportionate to the economic problems. You're
getting a lot because you've got a lot of problems," said Philip
Isherwood, strategist at Dresdner Kleinwort.
Cracks emerged in the global effort to drag the world out of
recession with Germany attacking Britain ahead of an EU summit
for rushing into debt to bail out industries and pump up growth.
A proposed U.S. auto industry bailout also headed for a clash,
in the U.S. Senate where there is Republican opposition.
Deflation fears grew in China while South Korea and
Switzerland cut interest rates to keep their economies afloat.
Among other stocks, Finnish papermaker UPM-Kymmene
<UPM1V.HE> fell 8.6 percent after it warned that fourth-quarter
profit would miss targets, and rivals said they were prepared
for more production cuts.
The Belgian government may be willing to cede its 11.6
percent stake in French bank BNP Paribas <BNPP.PA> to Fortis
<FOR.BR> in the future, but has no current plan to do so, a
spokesman for the prime minister said. BNP rose 1.3 percent,
while Fortis jumped 15 percent.
(Additional reporting by Brian Gorman; Editing by Rupert
Winchester)
