* FTSEurofirst 300 falls 1.2 percent; down 15 pct in 2009
* Analysts point to worries Fed move might stoke inflation
* Banks, autos fall; miners up on firmer metals prices
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, March 20 (Reuters) - European shares fell on Friday,
led lower by financial stocks, on concerns that the U.S. Federal
Reserve's action to pump another $1 trillion into the financial
system could stoke inflation in the long term.
At 1002 GMT, the FTSEurofirst 300 <> index of top
European shares was 1.2 percent lower at 706.84 points after
rising 0.6 percent in the previous session. It has fallen 15
percent so far this year after plunging 45 percent in 2008.
Banks were the top losers in Europe, with Barclays <BARC.L>
down 4.8 percent, Societe Generale <SOGN.PA> falling 2.5
percent, Standard Chartered <STAN.L> down 4.6 percent and Credit
Agricole <CAGR.PA> falling 2.2 percent.
"People have some concerns about the potential inflationary
effects of what the Federal Reserve has done. If everything is
implemented, then the balance sheet of the Federal Reserve will
have gone up by about $3,000 billion," said Luc Van Hecka, chief
economist at KBC Securities.
"That's a lot of money and it's not unusual that people tend
to see this as a threat to price stability somewhere in the
future."
The Federal Reserve said this week that it would buy $300
billion of long-dated Treasuries over the next six months, its
first large-scale purchases of government debt since the early
1960s, while also boosting buying of mortgage-backed securities
and agency debt in its bid to rescue the economy.
HSBC <HSBA.L> fell 4.9 percent as the stock traded
ex-rights. HSBC investors backed its record 12.9 billion pound
rights issue on Thursday [], and trading the nil-paid
shares allows investors to sell their rights to new shares.
"Whilst the positive trading sessions have been welcomed, it
is clear to everybody that this is still a market fraught with
volatility," said Chris Hossain, senior sales manager at ODL
Securities.
Across Europe, the FTSE 100 index <>, Germany's DAX
<> and France's CAC 40 <> were down 0.4-1.3 percent.
GLOBAL ECONOMY
Fresh data raised concerns about the state of the global
economy. Germany's economic contraction likely intensified in
the first quarter of this year, its finance ministry said in its
March monthly report.
The International Monetary Fund warned the world economy
could shrink as much as 1 percent this year, in its first
contraction since World War Two. It said more swift action to
purge banks of toxic assets was necessary to make a gradual
recovery next year possible.
EU leaders are likely to agree to contribute at least $75
billion to the IMF to boost its firepower in the face of the
worst financial crisis since the 1930s.
"This looks like a good opportunity to start getting into
the market again and this conviction is slowly gaining ground,
but people are not in a hurry because they have noticed over the
past year and a half that sometimes you get these relief rallies
only to fizzle out again," said Hecka of KBC Securities.
Automakers were under pressure as demand for cars continued
to be hit. BMW <BMWG.DE>, Daimler AG <DAIGn.DE>, Porsche
<PSHG_p.DE>, Volkswagen AG <VOWG.DE>, Peugeot <PEUP.PA>, Fiat
<FIA.MI> were down 1.1-4.5 percent.
But miners were generally higher, tracking firmer metals
prices. Anglo American <AAL.L>, Antofagasta <ANTO.L> and
Eurasian Natural Resources <ENRC.L> rose between 2-3.5 percent.
Bayer <BAYG.DE> shares jumped 7 percent following a green
light for its key new drug Xarelto from a U.S. panel.
German industrial conglomerate ThyssenKrupp <TKAG.DE> plans
to cut more than 3,000 jobs or about 1.5 percent of its total
staff amid a slump in demand, the Financial Times reported on
Friday. Its shares were down 0.6 percent.
(Reporting by Atul Prakash; editing by John Stonestreet)
