By Toni Vorobyova
LONDON, May 8 (Reuters) - European stocks dipped on Thursday
as banking shares fell, with losses partly offset by hopes that
Wall Street will open higher following strong sales data from
U.S. retail giants Wal-Mart <WMT.N> and Costco <COST.O>.
UBS <UBSN.VX> led the blue-chip losers and banks remained
under pressure as the Bank of England and European Central Bank
left rates unchanged, disappointing minority bets for a cut.
Worries over banks' liquidity deepened after comments from a
U.S. market regulator and the DJ Stoxx banking index <.SX7P>.
The spotlight now turns to president Jean-Claude Trichet's news
conference at 1230 GMT for any signs of a softening the ECB's
hawkish rhetoric.
"There was some talk of a back-to-back cut going into the
meeting after a run of gloomy data over recent days," said
Geraldine Concagh, economist at AIB Group Treasury in Dublin.
UBS, Barclays <BARC.L> and Societe Generale <SOGN.PA>
dropped 2-3 percent. Banks took a net 3.3 points off the index.
By 1229 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.05 percent at 1,361.42 points,
retreating from Wednesday's four-month closing high.
UNILEVER BRIGHTENS
Stock losses were limited, however, by strong results from
consumer goods conglomerate Unilever <ULVR.L>, which pushed up
shares in the group by more than 4 percent, making it the
largest individual positive influence on the broader market.
"We've seen a reasonable rally of (banking) stocks from the
March lows, and the market...is maybe just beginning to reflect
on the effects of the credit crisis on the broader economy and
that's feeding back into credit adversity," said Jonathan
Lawlor, head of European research at Fox-Pitt, Kelton.
"It's a trigger for a bit of profit-taking," he added.
The pan-European banking sector was down 0.9 percent as
financials were also hurt by earnings and outlook comments.
UniCredit <CRDI.MI>, Europe's third-largest bank said
earnings this year may fall below 2007 levels as the credit
crunch fallout hit its markets and investment banking business.
Insurers Munich Re <MUVGn.DE>, Old Mutual <OML.L> and Royal
& Sun Alliance <RSA.L> warned that market conditions would be
tough this year, while earnings from Austrian bank Raiffeisen
International <RIBH.VI> missed forecasts.
Munich Re and Old Mutual fell 2.5 percent while Royal & Sun
Alliance <RSA.L> gained 1.8 percent after saying that it
expected good results this year despite the tough market.
Raiffeisen fell 6.6 percent to top European losers.
OIL HITS TRAVEL STOCKS
Fresh record highs in the oil price -- near $124 a barrel
<CLc1> -- weighed on fuel-sensitive sectors such as airlines.
The transport and leisure sector <.SXTP> was among the worst
performers in Europe, down 0.7 percent.
Lufthansa <LHAG.DE>, Iberia <IBLA.MC> and British Airways
<BAY.L> all fell by around 2 percent.
Inbev <INTB.BR> shed 5 percent after the world's second
biggest brewer posted below-forecast first-quarter results.
Among the gainers, Swiss bank Julius Baer <BAER.VX> rose 2.8
percent after talk of bid interest from Britain's Standard
Chartered <STAN.L>. Standard Chartered declined to comment.
Lonmin <LMI.L>, the world's third largest platinum producer,
rallied 4.5 percent after posting a big profit jump.
There was also some optimism in the consumer sector from
British retailer Next <NXT.L>, which said it hoped sales would
pick up in the second quarter after a gloomy start to the year.
Next shares rose 6 percent to a two-month high, while rival
Marks & Spencer added 3 percent <MKS.L>.
Around Europe, Germany's DAX index <> was down 0.3
percent, Britain's FTSE 100 index <> was flat and France's
CAC 40 <> eased 0.2 percent.
(Additional reporting by Veronica Brown; Editing by Louise
Ireland)
