* FTSEurofirst 300 index falls 0.5 percent
* Porsche tumbles on likely VW merger delay
* RWE slips as sees bigger drop in profit
* For up-to-the minute market news, click on []
By Joanne Frearson
LONDON, Feb 24 (Reuters) - European shares fell on Thursday
as turmoil in Libya drove up oil prices and fuelled concern
about growth, while Porsche <PSHG_p.DE> plummeted after saying
its merger with Volkswagen <VOWG_p.DE> would likely be delayed.
By 1004 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was down 0.5 percent at 1,146.79 points, a
fourth straight session of losses this week and the fifth since
the market rally ended Feb. 18.
"There has been another spike in oil and general unrest in
the Middle East has knocked all confidence out of the market,"
Mark Priest, senior equities trader at ETX Capital, said.
"We cannot see a turnaround unless the situation is resolved
in Libya."
Investor sentiment remained jittery after Brent crude
<LCOc1> surged to its highest level since August 2008 on supply
concerns, with fears this could feed through into higher
inflation and hurt company margins.
Goldman Sachs said oil markets were driven by fear of
political unrest spreading. The turmoil has cut more than a
quarter of OPEC member Libya's crude output and there are
worries unrest could spread to oil rich countries including top
exporter Saudi Arabia. []
Muammar Gaddafi has vowed to crush the revolt, but Egyptian
workers had said anti-government militias were in control of the
Libyan town of Zuara, about 120 km (75 miles) west of the
capital. [] []
Carmakers, which come under pressure when the oil price is
high, featured among the worst performers, with the STOXX Europe
600 Automobiles & Parts <.SXAP> dropping 2.5 percent.
Porsche <PSHG_p.DE> fell 8.9 percent after saying its merger
with Volkswagen <VOWG_p.DE> is more likely to be delayed after
German prosecutors found evidence of further crimes in an
investigation of former board members. []
Volkswagen slipped 3.8 percent.
France's Vallourec <VLLP.PA> lost 5.1 percent after it said
margins in the first half of the year would be held back as it
predicted a strong rise in raw materials costs. []
RWE FALLS
RWE <RWEG.DE>, Europe's fifth-largest utility, fell 5.6
percent after saying it expects a bigger-than-anticipated drop
in 2011 operating profit. []
Royal Bank of Scotland <RBS.L> slipped 2.8 percent after its
results included bad debts from Ireland and an uninspiring
investment banking performance. []
"The situation in Ireland has had a painful effect on the
bank's numbers. Whilst in line with many of its global peers the
investment banking arm has failed to inspire," Richard Hunter,
head of UK Equities at Hargreaves Lansdown Stockbrokers, said.
But French bank Credit Agricole <CAGR.PA> rose 4.7 percent
after it dismissed fears it would have to raise new capital to
meet tougher Basel III banking rules. []
Capita <CPI.L> gained 7.2 percent after the British
outsourcing group's full-year profit rose 12 percent and it gave
a positive outlook on 2011. []
German gross domestic product (GDP) grew 0.4 percent in the
fourth quarter, powered by foreign trade. []
Across Europe, the FTSE 100 <> index was down 0.5
percent, Germany's DAX <> lost 1 percent and France's CAC
40 <> was down 0.4 percent.
(Reporting by Joanne Frearson; editing by David Hulmes)
