Europe shares slip as deep recession concern mounts

                                
 * FTSEurofirst 300 closes 4.2 percent lower
                                
 * Banks worst hit
                                
 * Commodities shares track crude, metals prices down
                                
 
                                
 By Atul Prakash
                                
 LONDON, Nov 11 (Reuters) - European shares closed sharply
lower on Tuesday, pressured by banking and commodity stocks, as
a poor corporate outlook worldwide and a flurry of grim economic
data raised concerns about a deep global recession.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
ended 4.2 percent lower at 883.56 points, after rising 0.9
percent on Monday. The index has lost 41 percent this year,
hammered by the credit crisis and resulting economic slowdown.
                                
 The banking sector took the most points off the index, with
Lloyds <LLOY.L> falling 9.1 percent, HBOS <HBOS.L> slipping 7.9
percent, UBS <UBSN.VX> falling 8.4 percent and HSBC <HSBA.L>
shedding 5.3 percent.
                                
 Commodity stocks were also under pressure, tracking a sharp
decline in crude and metals prices.
                                
 "There is no surprise that investors continue to be spooked
by a wave of disappointing economic data, and forecasts in terms
of economic growth around the world continue to come down," Henk
Potts, equity strategist at Barclays Stockbrokers, said.
                                
 "In the short term, you have to believe that equity markets
will continue to be under pressure.
Weak economic readings from China, Japan and Britain and a
grim corporate outlook lifted fears of a prolonged recession.
                                
 Chinese import growth slowed in October, while in Japan,
exports fell nearly 10 percent in the first 20 days of October
and corporate bankruptcies jumped 13.4 percent year-on-year.
                                
 Data showed German analyst and investor sentiment about the
outlook for Europe's largest economy improved but remained
gloomy, while British retail sales fell by the biggest amount in
more than three years last month, and home sales slumped to
their lowest level in at least 30 years.
                                
 Italy's biggest bank Intesa Sanpaolo SpA <ISP.MI> joined
domestic rival UniCredit <CRDI.MI> in taking tough steps to
shore up its financial strength, saying it would not issue a
cash dividend. Its shares closed flat after slumping nearly 17
percent earlier in the session. [ID:nLB452681]
                                
 InterContinental Hotels <IHG.L>, the world's largest
hotelier, warned of a sharp fall in October trading as the
global economic slowdown hit the hotel industry. Its shares were
down 7.6 percent.
                                
 "The question is whether things are really as bad as the
market would suggest, and the answer is probably no, but no-one
is prepared to put their neck on the line and put big bucks on
it," said Edmund Shing, strategist at BNP Paribas, in Paris.
                                
 But mobile group Vodafone <VOD.L> was a standout gainer, up
6.2 percent after reporting first half results slightly ahead of
expectations and saying it would focus on cost cuts to maintain
profits as it lowered its guidance on full-year revenue.
                                
 Across Europe, Britain's FTSE 100 <.FTSE>, Germany's DAX
<.GDAXI> and France's CAC-40 <.FCHI> were down between 3.6 and
5.3 percent.
                                
 
                                
 ENERGY WEAK, COMMODITIES SUFFER
                                
 Energy stocks were under pressure, tracking crude prices
that tumbled as investors refocused attention on the prospect of
widespread recession, which is likely to cut oil demand in many
developed economies.
                                
 Shares in BP <BP.L>, Royal Dutch Shell <RDSa.L>, gas
producer BG Group <BG.L> and Tullow Oil <TLW.L> shed between 3.9
and 9.8 percent.
                                
 Miners also declined in line with a 6.8 percent drop in
copper prices, a 1.9 percent fall in aluminium prices, a 5.7
percent drop in nickel prices and a 2 percent dip in gold.
                                
 BHP Billiton <BLT.L>, Anglo American <AAL.L>, Vedanta
Resources <VED.L>, Lonmin <LMI.L>, Kazakhmys <KAZ.L>, Xstrata
<XTA.L>, Antofagasta <ANTO.L> and Rio Tinto <RIO.L> fell between
7.3 and 14.4 percent.
                                
 Among individual stocks, Spain's Banco Santander <SAN.MC>
was down 7.1 percent, extending its decline from Monday, when it
announced a $9 billion rights issue.
                                
 Deutsche Lufthansa AG <LHAG.DE> fell 5.9 percent. A source
familiar with the matter said the company had temporarily broken
off talks to buy Scandinavia's loss-making airline SAS <SAS.ST>.
  (Additional reporting by Sarah Marsh in Frankfurt and Brian
Gorman in London; editing by Elaine Hardcastle)