* FTSEurofirst 300 falls 1.5 percent
* Banks under pressure on poor economic outlook
* Miners, oils slip
By Atul Prakash
LONDON, Feb 12 (Reuters) - European shares hit a one-week
trough on Thursday, led lower by banks, as poor corporate
results and fresh signs of deteriorating global economic outlook
overshadowed a compromise deal on a massive U.S. stimulus plan.
By 0949 GMT, the FTSEurofirst 300 <> index of top
European shares was down 1.5 percent to 791.78 points after
falling as low as 787.14. The index is down 4.8 percent this
year after plunging 45 percent in 2008.
Banks were among the top fallers on the index, with
Commerzbank <CBKG.DE> falling 5.4 percent, Credit Agricole
<CAGR.PA> down 3.5 percent and Societe Generale <SOGN.PA>
declining 3.4 percent.
Energy shares were also under pressure as crude prices eased
to trade below $36 a barrel -- down 75 percent from a record
high near $150 just seven months ago. BP <BP.L>, Royal Dutch
Shell <RDSa.L>, Repsol <REP.MC> and Tullow Oil <TLW.L> shed
between 0.3 and 1.3 percent.
Governments are using "historically strong medicines to try
to revive a patient that is looking very weak at the moment and
so far almost everything that has been used has failed to work,"
said Henk Potts, strategist at Barclays Stockbrokers.
Investors hoped the measures would support in the long term,
but there was a lot of nervousness before they saw the results
of the U.S. government's efforts on the economy, he added.
The pessimism over a compromise deal on a $789 billion U.S.
package, which helped Wall Street shares to gain overnight,
evaporated after investors scrutinised a raft of disappointing
corporate results and macroeconomic data.
Figures showed Japanese wholesale prices dropped in the year
to January, the first drop in five years, bringing the world's
second-largest economy closer to its second bout of deflation in
a decade as the economy slipped deeper into recession.
Earnings results also hurt sentiment.
Swiss engineering group ABB <ABBN.VX> posted an 88 percent
fall in fourth-quarter net profit, oil major Total <TOTF.PA>
reported an 8 percent drop in profits due to lower oil prices
and output, while banking group KBC <KBC.BR> booked a $3.4
billion loss due to writedowns.
RIO TINTO STAKE
"Asides from the stimulus package, the big news has been the
large stake in Rio Tinto being sold to Chinalco," said Andrew
Turnbull, senior sales manager at ODL Securities.
"The deal is said to be the largest overseas deal by the
Chinese and really does show how desperate for cash Rio Tinto
has become," he said.
Rio Tinto <RIO.L> will sell $12.3 billion in asset stakes
to Chinalco and raise a further $7.2 billion by issuing China's
top aluminium maker convertible notes to cut debt, the global
miner said. Rio shares were up 1.2 percent.
The negative market sentiment spread to other sectors such
as mining, electricity, telecommunications and retail.
Miners, struggling due to falling prices and slowing demand
of metals, fell again. BHP Billiton <BLT.L>, Anglo American
<AAL.L>, Xstrata <XTA.L> and Antofagasta <ANTO.L> fell between
0.8 percent and 3.3 percent.
Among electricity companies, Enel <ENEI.MI> dropped 2
percent and Renewable Energy <REC.OL> slipped 1.4 percent.
France's EDF <EDF.PA> fell 7 percent after it posted a dip
in 2008 core earnings, hit by a larger-than-expected 1.2 billion
euro ($1.55 billion) charge related to French regulated tariffs.
Britain's BT Group <BT.L> dropped more than 5 percent after
its core earnings slumped 9 percent in the third quarter and
pre-tax profits slumped 81 percent.
Among gainers, French carmaker Renault <RENA.PA> rose 5.9
percent after it dropped its once sacrosanct 2009 profit targets
and said it would focus on cutting inventories this year.
Across Europe, the FTSE 100 index <>, Germany's DAX
<> and France's CAC 40 <> were down 1.1-1.9 percent.
(Reporting by Atul Prakash; Editing by Andrew Macdonald)
