* FTSEurofirst 300 falls 0.7 pct after 5 days of gains
* Miners slip on weaker metals prices, Alcoa news
* Banks generally higher, but investors stay cautious
By Atul Prakash
LONDON, March 17 (Reuters) - European shares ended lower on
Tuesday after rising for five straight sessions, as weakness in
mining shares on a drop in metal prices and news of a dividend
cut at Alcoa <AA.N> outweighed gains in the banking sector.
The FTSEurofirst 300 <> index of top European shares
closed 0.7 percent lower at 715.83 points after falling as low
as 706.05 earlier in the day. It is still down 14 percent this
year after plunging 45 percent in 2008.
Miners lost ground as copper fell 1.8 percent, nickel fell
1.2 percent and zinc shed 2.3 percent.
They also came under pressure after Alcoa, the top U.S.
aluminium producer, said it will slash its dividend, issue stock
and convertible notes worth about $1.1 billion and trim its 2010
spending to help weather the steep downturn in aluminium demand.
BHP Billiton <BLT.L>, Rio Tinto <RIO.L>, Anglo American
<AAL.L>, Antofagasta <ANTO.L> and Eurasian Natural Resources
<ENRC.L> fell between 2.7 percent and 9.3 percent.
"There have been some encouraging comments from people like
(U.S. Federal Reserve Chairman Ben) Bernanke, but it's clear
that comments alone will not do the trick," said Luc Van Hecka,
chief economist at KBC Securities.
"Some convincing measures about the capital adequacy in the
banking system and probably some stabilisation in asset prices
are required now. While it looks more and more possible ...
there are still some doubts."
Bernanke recently said the United States should start
recovering from recession next year if there is political will
to finish the costly rescue of its shattered banking system.
Banking stocks were mostly higher.
HSBC <HSBA.L> rose 4 percent after Europe's biggest bank
said its trading in February was in line with market
expectations following its strong start to the year.
Among other banks, Natixis <CNAT.PA> jumped 9.8 percent,
Societe Generale <SOGN.PA> rose 3.9 percent, Dexia <DEXI.BR> was
up 3.9 percent and Lloyds <LLOY.L> gained 1.7 percent.
The broader STOXX 600 <> index was down 0.7 percent at
172.05 points. Across Europe, the FTSE 100 index <>,
Germany's DAX <> and France's CAC 40 <> fell between
0.2 percent and 1.4 percent.
SUSTAINED RECOVERY?
A series of data showed some positive signs, but analysts
warned against any hasty predictions of a sustained recovery.
A monthly poll by the ZEW economic institute in Germany,
Europe's biggest economy, showed analyst and investor sentiment
rising to -3.5 in March, from -5.8 in February.
The index was expected to fall, reflecting plummeting global
demand for traditional German products like cars. []
New U.S. housing starts and permits also unexpectedly
rebounded in February, providing a rare dose of good news for
the recession-hit economy and fractured housing market.
[]
"After the strong rally, global stock markets have entered
something of a holding pattern below some key levels," said Tim
Hughes, head of sales trading at IG Index.
"The change in sentiment towards the banking sector has
served the market well in recent days but there's a feeling that
the best of this has run its course for the time being."
Among other stocks, Nokia <NOK1V.HE> fell 3.1 percent. The
world's top cellphone maker said it will slash 1,700 jobs
globally over the coming few months because of falling demand.
Royal Dutch Shell Plc <RDSa.L> was down 1.3 percent. The
company said it would raise output by a healthy 2 percent to 3
percent annually over the next four years.
It said the outlook for the industry was too uncertain to
affirm longer-term targets.
In industry news, mining group Anglo American <AAL.L> said
it had sold its remaining 11.3 percent stake in South Africa's
AngloGold Ashanti <AGLJ.J><AU.N> for about $1.3 billion.
(Reporting by Atul Prakash; Editing by Andrew Macdonald)
