* FTSEurofirst 300 falls 2.4 percent, tracks global losses
* Financials take most points off index
* Gloomy economic data weighs
FRANKFURT, Nov 11 (Reuters) - European shares dropped in
morning trade on Tuesday, tracking losses on Wall Street and in
Asia, as fear of a widespread recession eclipsed optimism over
China's $600 billion stimulus package.
At 1033 GMT, the FTSEurofirst 300 <> index of top
European shares was down 2.4 percent at 900.63 points, after
rising 0.9 percent in the previous session on news of China's
package.
Fears for the global economy returned to the fore overnight,
with U.S. and Asian stocks pulling back after shares of General
Motors sank to a 62-year low and brokerages forecast that
Goldman Sachs will post its first-ever quarterly loss.
Record quarterly losses posted by Fannie Mae <FNM.P> and
insurer American International Group Inc <AIG.N> weighed on
financial equities, which took the most points off the European
benchmark index on Tuesday.
UBS <UBSN.VX> slumped 5.6 percent, HSBC <HSBA.L> slid 5.6
percent and Deutsche Bank <DBKGn.DE> was down 6.6 percent.
Among insurers, Allianz <ALVG.DE>, Axa <AXAF.PA> and Aegon
<AEGN.AS> were down between 6.2 and 7.6 percent.
"The high losses of AIG is worrisome, as are the numbers
from Fannie. This is weighing a bit on the market," said Tammo
Greetfeld, equity analyst at UniCredit in Germany.
"Regarding basic resources (stocks), growth concerns were
coming once again to the forefront in Asia and that is having an
impact."
Commodity stocks, which had bounced on news of the Chinese
stimulus plan, pulled back as fears for the global economy
returned to the fore and metals and oil prices <CLc1> retreated.
Miners fell, with Anglo American <AAL.L>, BHP Billiton <BLT.L>,
Rio Tinto <RIO.L> and Xstrata <XTA.L> 3.1-5 percent lower.
A FEW STEPS BACK
Analysts said Tuesday's move was not that sharp in view of
recent volatility, and European equities seemed to be in a
bottoming-out phase.
European shares have risen about 8 percent over the past two
weeks but are still down 40 percent this year, hammered by a
credit crisis which piled up losses at top banks and slowed the
economy.
Recession fears were fuelled by gloomy economic data from
Britain in particular, with house sales reaching their lowest
level in at least 30 years and retail sales falling by the
biggest amount in three years in October. []
"The market is still struggling to make further progress,
having rallied strongly from its lows two or three weeks ago ...
we have taken a lot of steps forward and are now taking a few
steps back," said Darren Winder, strategist at Cazenove.
"Most people are nervous about the shape of the recovery. It
certainly doesn't feel as if it is going to be a V-shaped
recovery, it feels as if we could be bumping along the bottom
for a while," he said.
An outstanding gainer on the benchmark was mobile group
Vodafone <VOD.L>, which soared 7.2 percent after reporting
first-half results slightly ahead of expectations.
[]
While the U.S. bond market will be closed on Tuesday for
Veterans Day holiday, the U.S. stock market will be open as
normal.
(Reporting by Sarah Marsh; Editing by Jon Loades-Carter)
