* FTSEurofirst 300 falls 2.2 pct after six days of gains
* Commodity stocks track sharp drop in metals, crude prices
* Banks slip as focus shifts from Obama to economic woes
*
By Atul Prakash
LONDON, Nov 5 (Reuters) - European shares ended lower on
Wednesday after six straight sessions of gains, as commodity
shares tracked falling crude and metal prices and the focus
shifted back to global economic growth after the U.S. election.
FTSEurofirst 300 <> index of leading European shares
closed 2.2 percent lower at 953.24 points. The index has lost
nearly 37 percent so far this year.
Analysts said the new U.S. administration under election
winner Barack Obama, which takes office in January, will face
the world's worst financial crisis since the Great Depression,
and a potentially steep downturn in the global economy.
"Back to the realities of financial world and it seems that
the euphoria didn't last that long, with stock markets around
the globe peering into what they increasingly believe will be a
long and protracted period of global recession," said Howard
Wheeldon, senior strategist at BGC Partners.
Commodity stocks were one of the biggest sectoral losers on
the index as crude oil prices fell more than 7 percent, while
copper, zinc and nickel prices slipped 3.7 to 6 percent.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, gas producer BG Group
<BG.L>, Cairn Energy <CNE.L> and Tullow Oil <TLW.L> shed between
1.9 and 4.2 percent.
Banking shares were also lower, with Standard Chartered
<STAN.L> losing 4.3 percent, UBS <UBSN.VX> falling 2 percent and
Commerzbank <CBKG.DE> shedding 3.4 percent.
"Nothing immediately is going to change as a result of the
election victory. We still haven't broken the downtrends," said
Darren Winder, head of economics and strategy at Cazenove.
"Sentiment is going to remain quite fragile. Banks continue
to be troubled by deteriorating loan quality and prospects of
further writedowns," he added.
OBAMA URGED TO LEAD
Political leaders urged U.S. President-elect Obama to help
forge a new economic order to lead the world out of its worst
financial crisis since the 1930s.
Germany's cabinet agreed a package of measures to give
Europe's biggest economy a 50 billion euro ($64.2 billion)
boost, while Italy will approve a plan to support banks.
Gloomy data from Britain and the 15-nation euro zone added
to expectations of hefty interest rate cuts on Thursday. British
manufacturing output fell for the seventh month running to mark
the longest stretch of declines in 28 years. In the euro zone,
service sector activity touched a fresh decade low in October.
In the United States, the service sector shrank unexpectedly
sharply in October, according to a report by the Institute for
Supply Management.
A series of European bank results did little to lift gloom
around the sector, with a recurring trend of falling profits and
rising bad debts stemming from the global financial crisis.
France's biggest bank BNP Paribas <BNPP.PA> fell 1.5 percent
after it posted a 56 percent fall in third-quarter profits.
Capital rebuilding continued in the face of a tough outlook
as Royal Bank of Scotland <RBS.L> looked to raise up to 3
billion pounds ($4.7 billion) from a government-backed bond. The
bank's shares were up 5.8 percent.
ArcelorMittal <MTP.PA> <ISPA.AS> fell more than 14 percent
after the world's largest steelmaker forecast a weaker final
quarter, slashed output and froze growth plans in the face of a
global slowdown.
Hannover Re <HNRGn.DE> shares slipped 5.5 percent after the
world's fourth-biggest reinsurer said it planned to pay no
dividend for 2008 after reporting a 395 million euro ($512.2
million) net loss in the third quarter due to writedowns on
investments and hurricane damage claims.
Across Europe, the FTSE 100 index was down 2.3 percent,
Germany's DAX was 2.1 percent lower and France's CAC 40 was down
nearly 2 percent.
(Reporting by Atul Prakash; Editing by Hans Peters)
