Europe shares end lower; financials slip, oils gain

                                
 * FTSEurofirst 300 ends 0.2 pct lower
                                
 * Financial stocks among top decliners
                                
 * Drugmakers, energy stocks rise
                                
 
                                
 By Atul Prakash
                                
 LONDON, May 12 (Reuters) - European equities closed lower in
choppy trade on Tuesday with weaker financial and mining stocks
outweighing positive drugmakers and energy shares.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
closed 0.2 percent lower at 852.62 points after hovering in a
broad range of 847.25-861.39. The index, which slumped 45
percent in 2008, is more than 30 percent higher from its
lifetime low on March 9.
                                
 Financial stocks were among the biggest decliners.
                                
 Barclays <BARC.L> was down 6.5 percent, Lloyds <LLOY.L> fell
10.3 percent, Royal Bank of Scotland <RBS.L> slipped 5.6 percent
and UBS <UBSN.VX> shed 7.3 percent.
                                
 "The markets are looking a little overbought. They had such
a sharp move in such a short space of time that they are in a
need of a period of consolidation," said Mike Lenhoff, chief
strategist at Brewin Dolphin.
                                
 "But in a sense, the market doesn't want to consolidate. The
underlying tone still seems to be very firm," he added.
                                
 Analysts said some investors took profits from recent hefty
gains. The DJ Stoxx banks index <.SX7P>, which hit a six-month
high last week, has doubled from a trough in early March.
                                
 A Credit Suisse warning that margin pressures could hit
Royal Bank of Scotland, Barclays and Lloyds by up to 20 billion
pounds also put pressure on the financial sector.
                                
 Analysts said the market also took a note of the news that
the European Union will 'stress test' its banking system by
September. EU sources and banking supervisors said the test was
aimed at determining the sector's resilience to the economic
downturn and to find out if it is adequately capitalised.
                                
 The European Union's plan follows a similar test of 19 U.S.
banks which concluded that 10 of them should boost their capital
by around $75 billion in total.
                                
 The International Monetary Fund estimates that banks around
the globe will need to write down about $2.8 trillion. So far,
about one-third of that amount has been written off and Europe
is lagging -- in the euro area, writedowns so far have totalled
$154 billion, with another $750 billion expected through 2010.
                                
 Across Europe, the FTSE 100 index <.FTSE>, Germany's DAX
<.GDAXI> and France's CAC 40 <.FCHI> were 0.2-0.5 percent lower.
                                
 
                                
 MINERS SLIP 
                                
 Miners lost ground. Anglo American <AAL.L> and Rio Tinto
<RIO.L> said they were wary about when hard-hit commodity
markets might recover but were confident about the long-term
health of the sector. [ID:nLC124886]
                                
 BHP Billiton <BLT.L>, Anglo American, Antofagasta <ANTO.L>,
Rio, Xstrata <STA.L>, Lonmin <LMI.L> and Eurasian Natural
Resources <ENRC.L> were down 1.4-8.6 percent.
                                
 But traditionally defensive stocks were in demand, with
drugmaker AstraZeneca <AZN.L> rising 2.4 percent,
GlaxoSmithKline <GSK.L> up 3 percent and Novartis <NOVN.VX>
gaining 2.2 percent.
                                
 Energy stocks also advanced as crude oil <CLc1> traded above
$58 a barrel. BP <BP.L>, Royal Dutch Shell <RDSb.L>, Tullow Oil
<TLW.L>, Repsol <REP.MC>, Total <TOTF.PA> and StatoilHydro
<STL.OL> added 0.5-2.2 percent.
                                
 "While focus over recent weeks has been on the revival of
the banking sector and its subsequent knock-on effect for world
stock markets, the price of oil has been quietly edging higher,"
said David Jones, chief market strategist at IG Index.
                                
 "With oil prices strengthening - and it is still early days
- some traders are starting to express concern that further
increases here could cap the rate of any wider industrial
recovery."
                                
 Airbus parent EADS <EAD.PA> fell 3.3 percent as it faced a
"substantial" earnings hit this summer as the company tries to
salvage its delayed A400M military aircraft project, compounding
concerns over the outlook for its civil airplane business.
                                
 On the macro-economic front, the U.S. trade gap widened less
than expected in March as exports fell 2.4 percent and imports
dropped for the eighth consecutive month, a U.S. government
report showed. [ID:nN11541619] 
                                
 And a Bank of France survey predicted the French economy
would shrink 0.6 percent in the second quarter, an easing in its
rate of decline. [nLC762967]
                                
 (Editing by David Cowell)