* FTSEurofirst 300 down 0.2 pct
* Miners fall after China raises rates
* SKF surges as results beat forecasts
* For up-to-the-minute market news, click on []
By Brian Gorman
LONDON, Oct 19 (Reuters) - European shares edged lower on
Tuesday, with mining stocks falling after China raised interest
rates, sending metals prices sharply lower.
However, industrials gained after forecast-beating results
at bearings maker SKF <SKFb.ST>.
At 1201 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was down 0.2 percent at 1,086.78 points,
after hitting its highest close in nearly six months on Monday.
The People's Bank of China said on Tuesday it was raising
its benchmark one-year interest rates by 25 basis points with
effect from Wednesday.
"It's a reflection of some of the issues in China as they
try to control the lending," said Justin Urquhart Stewart, Seven
Investment Management.
"They're trying to ensure that some of the assets bubbles
that may be occurring, especially in the property market, are
being suitably addressed, by curtailing cheap money."
Mining shares <.SXPP> fell 2.5 percent. Fresnillo <FRES.L>,
Vedanta <VED.L> and Xstrata <XTA.L> fell between 3.2 and 4.3
percent, as copper and other metals prices fell.
"I think China will be slowing this year, and mining shares
have seen their best levels," said Urquhart Stewart.
Energy companies fell, tracking falls in crude prices <CLc1>
after the dollar gained.
Total <TOTF.PA>, Repsol <REP.MC> and Statoil <STL.OL> fell
between 1.4 and 1.7 percent.
SKF surged more than 10 percent as the world's biggest
maker of bearings raised its financial targets after unveiling
forecast-beating quarterly earnings and a $1 billion U.S.
acquisition. []
The results also lifted the share prices for Atlas Copco
<ATCOa.ST>, Sandvik <SAND.ST> and Alfa Laval <ALFA.ST>, which
rose between 0.8 and 4 percent.
"It was a good update from SKF. It surprised people," said
Colin McLean, managing director at fund manager SVM in
Edinburgh.
Banks were among the gainers, following strong results at
Bank of America <BAC.N>
"Industrials and financials are strong and there's money
coming into the market. Sentiment is better among the Greek
banks, with EFG Eurobank <EFGr.AT> being able to use some of the
Greek bonds as collateral."
EFG rose 5.5 percent and the Greek banking sector index
<.FTATBNK> was up 3 percent.
Banco Santander <SAN.MC>, Societe Generale <SOGN.PA> and
UBS <UBSN.VX> rose between 1.7 and 2.7 percent.
In macroeconomics, German analyst and investor sentiment
deteriorated by less than forecast in October, a closely-watched
survey showed. The Mannheim-based ZEW economic think tank's
monthly poll of economic sentiment fell to -7.2 in October from
a reading of -4.3 in September. A reading of -8.0 was forecast.
(Editing by Hans Peters)
