European shares end lower on gloomy data, Wal-Mart

                                
 * FTSEurofirst 300 index ends 0.8 pct down
                                
 * Bank of England lowers interest rates to 1.5 pct
                                
 * Wal-Mart cutting earnings forecast hits sentiment
                                
 
                                
 By Atul Prakash
                                
 LONDON, Jan 8 (Reuters) - European shares fell on Thursday,
led lower by banks and miners, as a flurry of gloomy economic
data raised worries about a deep global recession and weak sales
by the world's top retailer, Wal-Mart <WMT.N>, hurt sentiment.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
ended down 0.8 percent at 870.92 points after falling as low as
859.83. It plunged about 45 percent in 2008.
                                
 Wal-Mart posted weak December same-store sales and cut its
quarterly earnings forecast. Several other retailers also warned
earnings would be worse than expected in the fourth quarter.
                                
 The banking sector took the most points off the index, with
Commerzbank <CBKG.DE> falling 13.8 percent, Deutsche Bank
<DBKGn.DE> slipping 5.7 percent, Standard Chartered <STAN.L>
down 6.5 percent and DT Postbank <DPBGn.DE> falling 8.8 percent.
                                
 Miners also slipped, tracking metal prices that fell on
concerns about slowing demand. BHP Billiton <BLT.L>, Anglo
American <AAL.L>, Vedanta Resources <VED.L>, Xstrata <XTA.L> and
Rio Tinto <RIO.L> fell between 3.1 percent and 5.9 percent.
                                
 A series of negative economic data painted a bleak picture.
                                
 In the euro zone, sentiment set record lows in December amid
rising unemployment, while inflation expectations tumbled,
further strengthening the case for a deep European Central Bank
rate cut next week. [ID:nL8189665]
                                
 "The markets are not completely stupid in worrying about the
risk of a prolonged slump because there is a lot of deleverage
coming through from the banking sector," said Andrew Bell, head
of research at Rensburg Sheppards.
                                
 "But it's more likely that by the end of this year, a way
will have been found to make the credit market function again
and a combination of lower interest rates, lower oil prices,
some tax cuts and government spending programmes will have moved
us from big negative numbers to small positive growth numbers."
                                
 The Bank of England cut interest rates by half a percentage
point to a record low of 1.5 percent and economists expected it
to cut again in February as it battled to prevent Britain from
falling into a deep slump.
                                
 Across Europe, the FTSE 100 index <.FTSE>, Germany's DAX
<.GDAXI> and France's CAC 40 <.FCHI> fell between 0.1 percent
and 1.2 percent.
                                
 
                                
 GRIM OUTLOOK
                                
 Investors remained nervous because of the flow of poor
economic data. In Spain, unemployment rose more than expected in
December to top 3 million for the first time in more than 12
years.
                                
 German manufacturing orders fell a much bigger-than-expected
6 percent in November, hit by poor demand at home and abroad.
                                
 Exports fell an unprecedented 10.6 percent in November as
demand for cars and others mainstays of the manufacturing
economy sank.
                                
 "We are slowly beginning to realise just how bad things are
getting," said Neil Parker, strategist, Royal Bank of Scotland.
                                
 "There were a whole load of confidence indicators, and all
of them were worse than expected. Hopefully, sooner or later,
the ECB will wake up and they will cut rates much more than they
have so far," he said.
                                
 In addition to U.S. retailers, the warnings came from
Britain's two biggest employment agencies, Hays <HAYS.L> and
Michael Page <MPI.L>, microchip maker Intel Corp <INTC.O>, PC
firm Lenovo <0992.HK> and investment bank Macquarie <MQG.AX>.
                                
 There were some positive stocks as well. Oil shares rose
despite a 2.4 percent fall in crude. BP <BP.L>, Royal Dutch
Shell <RDSb.L> and Tullow Oil <TLW.L> added between 1.6 percent
and 5.3 percent.
                                
 Aviva <AV.L>, Britain's biggest insurer, said its joint
venture with state-owned ABN AMRO in the Netherlands would
continue after the Dutch government reversed a decision by ABN's
previous owner to end the deal. Aviva shares rose 4.5 percent.
                                
 German chipmaker Infineon <IFXGn.DE> fell 10.5 percent after
a U.S. research firm, iSuppli, said global sales of dynamic
random access memory chips were set to fall 4 percent in 2009 --
the third straight year of declines. [nSEO8456].
                                
 Air France-KLM <AIRF.PA> looked to have all but sealed an
alliance with Alitalia as rival Lufthansa <LHAG.DE> threw in the
towel after a three-month battle for a minority stake in the
revamped Italian airline. Air France was down 2.2 percent.
 (Additional reporting Brian Gorman and Joanne Frearson; Editing
by Andrew Macdonald)