* FTSEurofirst 300 falls 0.6 pct, down for sixth session
* Auto, banking shares under pressure on growth worries
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, Oct 4 (Reuters) - European equities slipped for a
sixth straight session to a one-month low on Monday, led lower
by automobile shares, with lingering concerns about the state of
global economic recovery making investors nervous.
Appetite for risky assets such as equities fell, with the
VDAX-NEW volatility index <.V1XI> jumping 5 percent to a
one-month high. The higher the index, which is based on sell and
buy options on Frankfurt's top-30 stocks <0#.GDAXI>, the lower
the market's desire to take risk.
By 0822 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.6 percent at 1,051.96 points after
touching 1,047.29 -- the lowest since early September.
The index slipped for a sixth straight session, its longest
losing streak since January 2009. It fell on Friday on data
showing growth in the U.S. manufacturing slowed last month.
Investors awaited U.S. monthly factory orders and pending home
sales on Monday for more insight on the outlook for the economy.
"On the one hand people are very nervous about the economy,
but on the other hand you don't want to be too negative and too
short either because you know that (Federal Reserve Chairman
Ben) Bernanke is there," said Philippe Gijsels, head of research
at BNP Paribas Fortis Global Markets in Brussels.
"Eventually he will put more money once again into the
system," he said. "But I see more risk to the downside for the
market than the upside at the moment. Economic outlook remains
very weak and it's clear that the world economy is slowing."
Automobile shares <.SXAP>, which generally derive strength
from a bright economic outlook, dropped 1.8 percent. BMW
<BMWG.DE>, Daimler AG <DAIGn.DE>, Renault <RENA.PA> and Fiat
<FIA.MI> fell 1.1 to 2.5 percent.
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC 40 <> fell 0.8 to 1.1 percent.
BANKS UNDER PRESSURE
Financials also came under pressure as investors remained
worried about their ability to advance at a time when the global
economic outlook was not very bright.
The New Economics Foundation (NEF) thinktank said British
banks may need another state bailout next year and their
borrowing requirements could hit 25 billion pounds ($39.4
billion) a month. []
Switzerland has set out to further tighten the reins on UBS
<UBSN.VX> and Credit Suisse <CSGN.VX>, requiring them to hold
capital well in excess of new standards. []
However, media reports suggested that two banks might have
to hold even more top-quality capital, indicating that the final
number maybe a compromise between the banks and regulators. UBS
and Credit Suisse rose 0.5 percent and 1.1 percent respectively.
But the STOXX Europe 600 banking index <.SX7P> fell 0.4
percent, with Barclays <BARC.L>, BNP Paribas <BNPP.PA>, Societe
Generale <SOGN.PA> and Bankinter <BKT.MC> down 0.6 to 2 percent.
Some analysts, however, stayed positive.
"We think investors are too negative on banks, and we
continue to see significant medium term re-rating potential,"
Bank of America Merrill Lynch said in a note.
"For many investors the Western European bank sector is
considered to be without growth ... we forecast 2.5 percent,
3.5 percent and 4.5 percent loan growth in 2010, 2011, and
2012."
The technical outlook was bearish, with the Euro STOXX 50
<>, the euro zone's blue-chip index, down 1 percent at
2,706.19 points to hover below its 50-day moving average and the
50 percent Fibonacci retracement of the index's fall from an
April high to a May low at 2,737.62 points. It could get support
at around 2,670 -- its 38.2-percent retracement level.
French drugmaker Sanofi-Aventis <SASY.PA> fell 0.8 percent.
It launched a hostile bid for Genzyme <GENZ.O> at $69 per share,
or $18.5 billion, setting off what could be a protracted battle
for control of the U.S. biotech company. []
(Editing by Sharon Lindores)
