* FTSEurofirst 300 closes 6 pct lower
* Commodites stocks track falling crude, metals prices
* Banks slip; concerns about economic growth mount
By Atul Prakash
LONDON, Dec 1 (Reuters) - European shares slumped on Monday,
pressured by banks and commodity stocks, as mounting concerns
about a prolonged global slowdown and weaker demand for oil and
metals hurt market sentiment.
The FTSEurofirst 300 <> index of top European shares
closed 6 percent down at 810.04 points after rising 13 percent
last week. The benchmark is down 46 percent so far this year
after posting gains in each of the previous five years.
Banks were the worst hit, with Standard Chartered Bank
<STAN.L> falling 14 percent and UBS <UBSN.VX> down 12 percent,
Fortis <FOR.BR> slipping 11 percent and BNP Paribas <BNPP.PA>
declining 7.6 percent.
Commodities shares also slipped, tracking an 8 percent drop
in crude prices, a 2.8 percent fall in aluminium prices and a
1.6 percent drop in copper prices, mainly on worries about
global economic growth.
"The short-term outlook is going to be very difficult, given
the weakening growth forecast, falling corporate profitability
and the softening labour market," said Henk Potts, equity
strategist at Barclays Stockbrokers.
"What the market would need to see is the practical
implication of the measures that have been announced starting to
work through the system and having a positive result."
A United Nations report said that world economic growth
would slow to 1 percent in 2009 from 2.5 percent this year as
the financial crisis bit, and the global economy might even
contract if stimulus packages proved too little too late.
The financial crisis that began with a U.S. housing market
collapse last year has already knocked several big economies
into recession, including the euro zone. Most economists believe
the United States and Britain will soon follow.
European and Chinese industry activity slumped in November,
Japanese officials said their economy was slowing rapidly and
U.S. factory activity fell in November to its weakest since the
1981-1982 recession.
"It is hard to see recoveries in stock markets as anything
but short term at the moment, and traders seem to be too willing
to jump out of rallies very quickly, ahead of the perceived next
major sell-off," said David Jones, chief market strategist at IG
Index.
RATE CUTS EXPECTED
Central banks in Britain, the euro zone, Australia and New
Zealand are expected to cut borrowing costs sharply this week in
response to the crisis.
Expectations for more rate cuts in Britain were underlined
by the UK's PMI index showing manufacturing shrank at a record
pace in November after a collapse in new orders. []
Miners tracked weaker metals prices. BHP Billiton <BLT.L>,
Anglo American <AAL.L>, Vedanta Resources <VED.L>, Lonmin
<LMI.L>, Kazakhmys <KAZ.L>, Xstrata <XTA.L>, Antofagasta
<ANTO.L> and Rio Tinto <RIO.L> fell between 7 and 18 percent.
Energy stocks were also down. BP <BP.L>, Royal Dutch Shell
<RDSa.L>, gas producer BG Group <BG.L> and Tullow Oil <TLW.L>
shed between 5.8 and 8.6 percent.
Automobile stocks fell as vehicle manufacturers in Sweden,
France, Spain, Japan and South Korea all reported tumbling
sales, taking fresh hits from plunging consumer confidence on
the world's car lots. []
Volkswagen <VOWG_p.DE> was down 6.4 percent, Daimler
<DAIGn.DE> fell 7.3 percent and Porsche <PSHGp_.DE> dropped 7.8
percent.
Dutch telecoms group KPN <KPN.AS> was down 2.7 percent after
the company said it would sell its Getronics unit's Business
Solutions activities for local governments and healthcare in the
Netherlands to Total Specific Solutions.
Across Europe, the FTSE 100 index <> closed 5.3 percent
lower, Germany's DAX <> was 5.9 percent lower and France's
CAC 40 <> was down 5.6 percent.
(Reporting by Atul Prakash; Editing by Hans Peters)
