* FTSEurofirst 300 loses 1.3 pct, down 6 pct over 2 weeks
* UBS's poor results, UK bank shake-up hits banking shares
* Weakening commodity prices drag on energy, mining stocks
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, Nov 3 (Reuters) - European stocks fell 1.3 percent in
early Tuesday trade, losing ground for the sixth time in nine
sessions, as poor results from UBS <UBSN.VX> and a shake-up of
UK banks Lloyds and Royal Bank of Scotland rattled investors.
Heavyweight energy and mining shares also dropped, falling
along with commodity prices. BP <BP.L> lost 1 percent, Total
<TOTF.PA> fell 0.8 percent, Rio Tinto <RIO.L> shed 2.2 percent
and Xstrata <XTA.L> dropped 2.7 percent.
At 0913 GMT, the FTSEurofirst 300 <> index of top
European shares was down 1.3 percent at 967.42 points after
touching a one-month low of 965.75 points earlier in the
session.
The index has lost 6 percent over the past two weeks, after
a raft of mixed macroeconomic data eclipsed recent
forecast-beating corporate results and halted the market's
seven-month rally.
The benchmark index is still up 50 percent from a record low
it hit in early March, and up 16 percent in 2009.
UBS sank 4.4 percent after the Swiss lender posted a
higher-than-expected accounting charge and withdrawals at all
its key divisions pushed it into another quarterly loss. It
said it did not expect an immediate recovery of client inflows.
Shares of Lloyds Banking Group <LLOY.L> gained 3.6 percent
after it launched a record 13.5 billion pound ($22 billion)
rights issue and, along with rival RBS <RBS.L>, agreed to sell
off businesses to limit their reliance on government support.
"While Lloyds looks set to deny the government majority
control by embarking on a rights issue, the outlook is not so
rosy for RBS," said Manoj Ladwa, senior trader at ETX Capital.
"Not only does RBS have to sell off a number of key assets,
but with 83 percent state-control, it is going to be seriously
constrained in the way it does business."
Shares of RBS dropped 1.7 percent, while Societe Generale
<SOGN.PA> fell 3.7 percent, Banco Santander <SAN.MC> dropped 2.4
percent, UniCredit <CRDI.MI> shed 2.3 percent and Deutsche Bank
<DBKGn.DE> lost 3.3 percent.
SWISS RE SURGES
The DJ STOXX European bank index <.SX7P>, which was down 2.4
percent on the day, has lost 10 percent since Oct 15.
"The timing for such a huge rights issue is quite bad. UBS
just posted ugly results that bode ill for European banks
results, and CIT <CIT.N> just filed for bankruptcy. This raises
the question: isn't it too early to pay back government money?"
said David Thebault, head of quantitative sales trading at
Global Equities in Paris.
Around Europe, the UK's FTSE 100 index <> was down 1.3
percent, Germany's DAX index <> down 1.4 percent, and
France's CAC 40 <> down 1.5 percent.
Swiss Re <RUKN.VX> surged 7.1 percent after the reinsurer
beat profit forecasts and said it had strengthened its capital.
Metro <MEOG.DE> gained 2.2 percent after the German retailer
posted solid third-quarter results, which analysts said showed
the success of the company's cost-cutting efforts.
BMW <BMWG.DE> dropped 6.7 percent after the German
automaker's third-quarter results missed expectations as sales
and profit margins shrank. The poor results hit the auto sector,
with Renault <RENA.PA> down 2.8 percent and Daimler <DAIGn.DE>
down 4 percent.
Later in the session, investors' focus will turn to the
macroeconomy, with U.S. factory orders and durable goods data
expected while U.S. Federal Reserve's policymakers start their
two-day meeting.
(Reporting by Blaise Robinson, editing by Nigel Stephenson)
