* FTSEurofirst 300 falls 0.3 percent
* Miners fall on lower metal prices
* India-focused shares gain; analysts welcome poll result
By Brian Gorman
LONDON, May 18 (Reuters) - European shares fell in early
trade on Monday, led lower by mining stocks that tracked a
decline in metal prices, while carmakers Porsche <PSHG_p.DE> and
Volkswagen <VOWG.DE> slipped after stopping merger talks.
At 0819 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.3 percent at 837.24 points, following
losses on Wall Street on Friday and in Japan on Monday.
The index lost 3 percent last week, but is up more than 29
percent from the lifetime low it hit on March 9.
"The market is drifting back towards risk aversion after a
strong run," said Bernard McAlinden, investment strategist at
NCB Stockbrokers, in Dublin.
"It's harder to sustain the rally at higher levels in the
market. It's not that the economic data is any worse but the
valuations are more demanding. Investors are saying 'Show me the
recovery.'"
Miners were lower, tracking weaker metal prices.
Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton
<BLT.L>, Rio Tinto <RIO.L> and Xstrata <XTA.L> fell between 2.1
and 4.7 percent.
However, Vedanta <VED.L> bucked the trend, rising 3.7
percent. Analysts welcomed election results in India, where
Vedanta has the majority of its operations.
The Indian election result was "a big positive surprise,"
said analysts at Deutsche Bank in a note.
"The political platform thus delivered to the Congress party
now raises huge expectations on the roadmap and velocity of
economic reform disinvestment, increasing foreign direct
investments, pension and insurance sector reforms."
"We believe the verdict is one of those rare instances which
justify a rerating of the Indian equity market," the bank said.
Oils fell, reacting to the sharp slide in crude prices
<CLc1> on Friday. Total <TOTF.PA>, ENI <ENI.MI>, BP <BP.L> and
Royal Dutch Shell <RDSa.L> fell between 0.9 and 1.9 percent.
Cairn Energy <CNE.L> which has interests in India, rose 2.7
percent.
Lloyds Banking Group <LLOY.L> rose 6.5 percent, after
announcing on Sunday that chairman Victor Blank will retire in
2010.
"With the Lloyds takeover of HBOS looking like the worst
deal, after RBS ABN-AMRO, in British corporate history, it can
be no surprise that the architect of the deal, Victor Blank was
going to carry the can. Early trading has shown the markets are
glad to see the back of him," said Manoj Ladwa, senior trader,
at ETX Capital.
PORSCHE <PSHG_p.DE> FALLS
German sportscar maker Porsche <PSHG_p.DE> fell 6.5 percent
after Volkswagen <VOWG.DE> halted merger talks between the two
companies. Volkswagen was down 1.6 percent. []
Pharmaceuticals were higher, led by GlaxoSmithKline <GSK.L>,
up 1.6 percent after taking another step to bolster its
early-stage pipeline of cancer drugs by signing a deal worth up
to $370 million with privately held British biotech group Oxford
BioTherapeutics. []
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC-40 <> were between 0.8 and 1.6
percent lower.
Japan's Nikkei <> fell 2.4 percent to its lowest close
since May 1. Exporters such as Sony Corp <6758.T> sank as the
yen advanced against the dollar.
Panasonic Corp <6752.T> dropped 7.6 percent after it
forecast a bigger-than-expected annual loss following a record
quarter of red ink, battered by weak demand, price falls and
restructuring costs. []
(Editing by David Cowell)
