* FTSEurofirst 300 index flat
* Banks, drugs gain; autos fall on stronger euro
* Carrefour jumps on reassuring update
By Sitaraman Shankar
LONDON, Aug 29 (Reuters) - European shares showed little
change early on Friday, with gains in drugmakers and banks
offsetting losses in auto stocks and Vodafone <VOD.L>, while a
reassuring update boosted retailer Carrefour <CARR.PA>.
At 0828 GMT, the FTSEurofirst 300 <> index of top
European shares was flat at 1,191.26 points, having traded in a
narrow five-point range.
Banks gained, with Fortis <FOR.BR> up 1.6 percent, Natixis
<CNAT.PA> up 3.7 percent and Intesa Sanpaolo <ISP.MI> up 1.3
percent, though Commerzbank <CBKG.DE> fell 2 percent on reports
that it was set to buy Allianz's <ALVG.DE> Dresdner unit.
UK mobile phone group Vodafone <VOD.L> took most points off
the index, with traders attributing its 1.2 percent fall to news
mobile phone operators may face a European Commission crackdown
on overcharging.
But Carrefour jumped 4.6 percent after it posted a rise in
first-half operating profit and reiterated its 2008 targets.
U.S. stocks rose sharply on Thursday after news the U.S.
economy grew at a surprisingly robust clip in the second
quarter.
"The Q2 GDP numbers were driven by net exports, and of
course were good but we need to see how and when housing markets
stabilise," said Tuomas Komulainen, Helsinki-based strategist at
Danske Market Securities.
Auto stocks were hit by a rise in the euro <EUR=>, with
Daimler <DAIGn.DE>, Volkswagen <VOWG.DE>, Peugeot <PEUP.PA> and
Renault <RENA.PA> falling 1 to 2.8 percent.
Across Europe, Britain's FTSE 100 <> was flat, while
Germany's DAX <> fell 0.2 percent and France's CAC <>
rose 0.1 percent.
NINE LOSSES OUT OF 10
On the last trading day in August, the FTSEurofirst 300 is
flat on the month and even a small fall on the day will make it
the ninth month of losses in the last 10.
The index is down nearly 21 percent this year, hammered by
bank writedowns, a slowing economy and uncertainty over interest
rates.
Investor focus now shifts to eurozone inflation,
unemployment and sentiment data at 0900 GMT.
"The eurozone inflation numbers should moderate and should
be even lower in September and beyond due the impact of lower
oil and the base effect," said Komulainen.
"The European Central Bank will stay tough because of the
wage negotiations in Germany but hopefully should start taking
the tone down," he added.
He said the central bank would, at some point, have to
cancel out its July rate increase of 25 basis points, and he
expected a softening in the rhetoric followed by a rate cut
possibly early in 2009.
The ECB is due to announce its next rate decision on Sept 4.
(Editing by Quentin Bryar)
