Commods drag European shares lower; BHP slips

                                
 * FTSEurofirst 300 index slips 0.4 percent
                                
 * BHP Billiton slips as goes hostile on Potash bid
                                
 * Xstrata gains on bid talk; Vestas Wind slumps on results
                                
 * For up-to-the minute market news, click on [STXNEWS/EU]
                                
 By Joanne Frearson
                                
 LONDON, Aug 18 (Reuters) - European shares slipped on
Wednesday to close under a key resistance level, with oils weak
as crude <CLc1> fell on U.S. demand concerns, while BHP Billiton
<BLT.L> dropped after a hostile bid for Potash <POT.TO>.
                                
 Oil stocks were among the worst performers as oil prices
fell after a report showed a sharp increase in petroleum
inventories in the United States, with BP <BP.L>, Royal Dutch
Shell <RDSa.L> and Total <TOTF.PA> down 0.8 to 2.6 percent.
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index closed 0.4
percent lower at 1,052.45 points. The Euro STOXX 50 <.STOXX50E>
was down 0.3 percent at 2,728.66 points, retreating from the 50
percent Fibonacci retracement of a drop from an April high to a
May low tested on Tuesday.
                                
 "Investors are just range trading until the heavy volumes
come back in September," said Joshua Raymond, market strategist
at City Index.
                                
 Volumes on the FTSEurofirst 300 were slim due to the holiday
period, at just 54 percent of the average 90-day trading volume.
                                
 "But there is some reaction to the individual corporate news
out there, like the BHP Billiton hostile bid for Potash and the
ENRC result," Raymond adds.
                                
 Miners were mostly lower. BHP Billiton slipped 3.4 percent,
after it launched a hostile $39 billion bid for Potash Corp,
while Kazakh miner ENRC <ENRC.L> fell 4.3 percent after the
company said it was wary about commodity prices in the second
half. [ID:nSGE67H031] [ID:nLDE6731FE]
                                
 Xstrata <XTA.L> bucked the trend and rose 1.1 percent after
traders cited market talk of bid interest from Swiss-based
commodity trader Glencore [GLEN.UL]. Both Glencore and Xstrata
declined to comment.
                                
 
                                
 VESTAS WIND SLUMPS
                                
 Denmark's Vestas <VWS.CO>, the world's biggest wind turbine
maker, slumped 23.1 percent after it posted a surprise
second-quarter loss and unexpectedly cut its 2010 earnings
outlook as customers delayed orders in the wake of the credit
crisis. [ID:nLDE67H0D2]
                                
 "Investors don't believe that the market is going to make a
new high this year ... because of the fear of a double dip in
the United States and people are very cautious," said Heino
Ruland, strategist at Ruland Research in Frankfurt.
                                
 On the upside, insurer Legal & General <LGEN.L> rose 2.7
percent after traders cited market talk of bid interest from
Zurich Financial <ZURN.VX>. Legal & General declined to comment.
                                
 Swiss Life's <SLHN.VX> jumped 7.9 percent after its profit
nearly doubled in the first half on the back of a strong
performance by German subsidiary AWD, allaying fears the insurer
could be forced into an embarrassing writedown of AWD's value.
[ID:nLDE67G1QX]
                                
 Danske Bank <DANSKE.CO> rose 4 percent, outperforming the
STOXX Europe 600 banking index <.SX7P> after BofA Merrill Lynch
upgrades the Nordic bank to "buy" from "neutral".
                                
 Across Europe, the FTSE 100 <.FTSE> index was down 0.9
percent, Germany's DAX <.GDAXI> was 0.3 percent lower and
France's CAC 40 <.FCHI> was down 0.4 percent.
 (Reporting by Joanne Frearson; Editing by Jon Loades-Carter)