* FTSEurofirst 300 index falls 2.8 percent
* Banks slip on renewed concerns about sectoral losses
* Autos suffer as U.S. rescue talks for the sector fail
By Atul Prakash
LONDON, Dec 12 (Reuters) - European shares ended lower on
Friday, dragged down by banking stocks that slipped on renewed
fears about big sectoral losses, while automakers suffered
following the failure of rescue talks for U.S. peers.
The FTSEurofirst 300 <> index of top European shares
closed 2.8 percent lower at 829.65 points, after falling as low
as 811.18. It has declined about 45 percent this year, hurt by a
global credit crisis.
Banks took most points off the index, with HBOS falling 23
percent after it said bad debt had soared. Barclays <BARC.L>,
Lloyds TSB <LLOY.L>, UBS <UBSN.VX> and Royal Bank of Scotland
<RBS.L> lost 8-17.8 percent.
"It's a very fragile situation and we are bumping along the
bottom at the moment," said Darren Winder, head of macro and
strategy research at Cazenove.
"There isn't a great deal of confidence around at the
moment. People are fearing the worst for the economy in 2009.
Obviously there is a general lack of liquidity in the market."
HBOS warned that bad loans and other losses this year had
jumped by two thirds in just two months to 8 billion pounds
($11.9 billion) as loans to companies soured, shortly before its
investors backed the British bank's takeover.
Overnight, the chief executive of JPMorgan Chase <JPM.N>
said the U.S. bank has had a "terrible" November and December,
blaming the "normal culprits:" mortgages, credit, and high-yield
bonds and loans.
Poor economic data also dampened sentiment.
Sales at U.S. retailers fell for a fifth straight month in
November, the longest decline in at least 16 years, as gasoline
sales tumbled by a record amount.
Euro zone industrial output fell the most steeply in more
than 15 years in annual terms in October, in a sign the
recession was deepening in the last quarter of 2008.
European Union leaders sealed a 200 billion euro ($264
billion) stimulus package, which had exposed deep differences
between Britain and Germany. [] Both the euro zone and
Japan are already officially in recession.
CARMAKERS SKID
Automakers suffered as the U.S. Congress failed to pass a
bill to bailout the sector. BMW <BMWG.DE>, Daimler <DAIGn.DE>,
Renault <RENA.PA>, Peugeot <PEUP.PA> and Porsche <PSHG_p.DE>
were down 1.9 to 6.1 percent.
The U.S. government warned that the economy could not
withstand the collapse of the auto industry and said it might be
willing to provide emergency funding to bailout the automakers.
"It's pretty serious stuff when Congress decides they want
to put a hold on providing a bailout for the big car
manufacturers," said Mike Lenhoff, chief strategist at Brewin
Dolphin.
"When push comes to shove, we're talking about millions of
jobs. That's people without incomes to spend. All sorts of
industries are affected by this."
Energy shares followed weaker crude prices <CLc1>, which
fell 6.5 percent. BP <BP.L>, Royal Dutch Shell <RDSa.L>, gas
producer BG Group <BG.L> and Tullow Oil <TLW.L> shed between 3
and 4 percent.
France's Alcatel-Lucent <ALUA.PA> fell 11.7 percent. The
company stepped up cost cuts and said it would shed 5,000
contractors as it gave a pessimistic forecast for the 2009
telecoms equipment market.
Man Group <EMG.L> fell 15.5. percent after Moody's Investors
Service affirmed all the ratings of the company and revised its
outlook on these ratings to negative from stable.
Across Europe, the FTSE 100 index was down 2.5 percent,
Germany's DAX was 2.2 percent lower and France's CAC 40 was down
2.8 percent.
(Additional reporting by Brian Gorman; Editing by Rupert
Winchester)
