* 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
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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 <
> 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. [
]Technical charts indicated there could be further losses ahead for European stocks.
Analysts said the STOXX Europe 50 <
> 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. [
]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 <
> index was down 0.5 percent, Germany's DAX < > fell 0.7 percent and France's CAC 40 < > lost 0.6 percent.The Thomson Reuters Peripheral Eurozone Countries Index <.TRXFLDPIPU> slipped 1.1 percent. (Reporting by Joanne Frearson; Editing by Hans Peters)