* FTSEurofirst down 1 percent at 850.93 points
* Battered banks lead decline
* Daimler BMW, Continental rise on state aid hopes
By Rebekah Curtis
LONDON, Nov 17 (Reuters) - European stocks slipped in choppy
trade early on Monday, with banks leading the decline, but BMW,
Daimler and Continental outperformed a glum auto-related sector
on hopes of state aid from Germany and the United States.
At 1002 GMT the pan-European FTSEurofirst 300 index <>
was down 1 percent at 850.93 points after flitting between
positive and negative territory in early trade.
Among banks, UBS <UBSN.VX> was down 2 percent, while HSBC
<HSBA.L> shed 2.6 percent, and BNP Paribas <BNPP.PA> lost 3
percent.
Deutsche Bank <DBKGn.DE> rose 1.5 percent after the bank's
chief executive was quoted as saying in an interview with a
newspaper that Germany's largest bank would not need money from
the state to survive the financial crisis.
Around Europe, Britain's FTSE 100 <> fell 0.6 percent,
Germany's DAX <> lost 0.1 percent, and France's CAC
<> fell 0.2 percent.
"We're still finding a floor here. We're bumping along the
bottom," said Darren Winder, a strategist at Cazenove in London.
"They (investors) are trying to see encouragement from lower
interest rates, but they are continuing to be fearful of how
much profits are going to fall in a recession."
Investors were also digesting data that showed Japan, the
world's second-largest economy, has slipped into recession.
Japan's economy shrank 0.1 percent in the third quarter for its
second straight quarter of contraction.
"All the major developed economies are now in recession, and
realistically none of them are going to emerge from recession
until the middle of next year at the earliest," Winder said.
Adding to the grim mood, the Confederation of British
Industry said on Monday Britain would suffer its sharpest
economic contraction in almost two decades next year and the
number of people out of work could rise to nearly 3 million by
2010.
The Group of 20 world leaders agreed Saturday to a raft of
fiscal and monetary steps to rescue the global economy, but it
was left to individual governments to tailor their response to
their particular circumstances.
AUTO HOPES
Shares in German carmakers BMW <BMWG.DE> and Daimler
<DAIGn.DE> added 4 and 5 percent, while tyre maker Continental
<CONG.DE> rose 10.7 percent as traders cited hopes of state aid
for the sector.
Shares in Infineon <IFXGn.DE> rose 2.7 percent after German
newspaper WirtschaftsWoche reported Infineon's U.S. peer Micron
<MU.N> had secured an option to acquire Infineon's remaining
76.8 percent stake in Qimonda <QI.N>.
Shares in HeidelbergCement <HEIG.DE> tumbled 15.7 percent,
the top decliners in Europe, after the Financial Times
Deutschland newspaper said the company's majority stake holders,
the Merckle family, could sell their stake to offset losses made
on Volkswagen <VOWG.DE> stock.
Parmalat SpA <PLT.MI> shares fell 4.2 percent after the
Italian dairy company said on Friday it was cutting its
full-year forecast for earnings before interest, tax,
depreciation and amortisation.
U.S. stocks lost ground on Friday after a record drop in
monthly retail sales heightened worries that U.S. consumers'
reluctance to spend would drag the economy into an even deeper
downturn than initially expected.
(Editing by Will Waterman)
