European shares slip ahead of G20; BP drops

                                
 * FTSEurofirst 300 index falls 0.5 percent
                                
 * BP hits 14-year low, bad weather looms
                                
 * Banks rise as lawmakers reach deal on Wall St bill
                                
 * For up-to-the minute market news, click on [STXNEWS/EU]
                                
 
                                
 By Joanne Frearson
                                
 LONDON, June 25 (Reuters) - European shares fell on Friday,
hitting a two-week low ahead of the weekend G20 meeting, with BP
<BP.L> hitting 14-year lows as it struggled to clean up the Gulf
of Mexico oil spill.
                                
 Oil shares featured among the worst performers. BP <BP.L>,
down 6.5 percent, continued its battle to contain the oil spill
as bad weather loomed. Five-year BP credit default swaps, an
insurance-like instrument against debt default, widened 19 basis
points to 555 basis points, CDS monitor Markit said.
                                
 Its peers BG Group <BG.L>, Royal Dutch Shell <RDSa.L> and
Total <TOTF.PA> fell 1 percent to 1.9 percent.
                                
 By 0922 GMT, the pan-European FTSEurofirst 300 <.FTEU3>
index of top shares was down 0.5 percent at 1,015.54 points, but
trading was choppy, with the index being up as much as 1,025.19
earlier in the session.
 "A nervous morning ahead of the G20, no one is really
wanting to take any big positions ahead of the G20," said Justin
Urquhart Stewart, director at Seven Investment Management.
"There is little reason for the market to drive higher today.
                                
 "Investors are worried about the increasing split between
Europe and the U.S. over when governments should cut budget
deficits."
                                
 Before the G20 summit in Toronto, officials tried to
downplay differences between the United States and Europe over
how quickly to shift from crisis-fighting mode to budgetary
belt-tightening. [ID:nN24260273]
                                
 Technical charts indicated there could be further losses
ahead for European stocks.
                                
 Analysts said the STOXX Europe 50 <.STOXX50> has held below
its 200-day moving average and if it breaks below its support
trend line of 2,394, the index could go back to revisit the May
low of 2,255.
                                
 The index was down 0.5 percent at 2,402.85 at 0922 GMT.
                                
 
                                
 BANKS RISE
                                
 Banks featured among the top risers, after sharp falls in
the previous session on news U.S. lawmakers were close to
finalise a historic overhaul of financial regulations as they
reached a preliminary deal on derivatives, the most contentious
sticking point of the bill. [ID:nN25155960]
                                
 HSBC <HSBA.L>, Banco Santander <SAN.MC> and Societe Generale
<SOGN.PA> rose 1.1 to 1.8 percent.
                                
 German carmakers Daimler <DAIGn.DE> and Volkswagen
<VOWG_p.DE> fell 2.6 percent and 2.3 percent respectively, after
UBS downgraded the stocks to "neutral" from "buy".
                                
 Later in the session, investors will eye the final estimate
of U.S. GDP growth figures for the first quarter, due at 1230
GMT. Investors will also look at the final reading of the June
University of Michigan consumer sentiment index, due at 1355
GMT.
                                
 Across Europe, the FTSE 100 <.FTSE> index was down 0.5
percent, Germany's DAX <.GDAXI> fell 0.7 percent and France's
CAC 40 <.FCHI> lost 0.6 percent.
                                
 The Thomson Reuters Peripheral Eurozone Countries Index
<.TRXFLDPIPU> slipped 1.1 percent.
 (Reporting by Joanne Frearson; Editing by Hans Peters)