* FTSEurofirst ends down 0.5 percent
* Automobiles slip on falling demand woes
* Energy shares track weaker crude prices
By Joanne Frearson
LONDON, Oct 21 (Reuters) - European shares closed lower on
Tuesday to break a two-day winning streak as automobile stocks
slipped on worries over falling demand and rising costs, while
energy shares tracked weaker crude prices.
The FTSEurofirst 300 <> index of top European shares
ended down 0.5 percent at 923.93 points, having been up as much
as 944.2 points earlier in the day.
Automobile stocks took the most points off the index, with
Volkswagen <VOWG.DE> down 12.4 percent, Fiat <FIA.MI> slipping
6.8 percent and Daimler <DAIGn.DE> down 1.4 percent.
Analysts expect European carmakers to abandon targets for
this year and next as they struggle with falling demand and
rising costs when they publish their quarterly numbers this
week. []
Pharmaceutical stocks also came under pressure. Roche
<ROG.VX> fell 5.4 percent as it reported a 2 percent fall
nine-month sales to 33.3 billion Swiss francs. []
GlaxoSmithKline <GSK.L> was down 1.5 percent and Novo
Nordisk <NOVOb.CO> was 2.9 percent lower.
"The market is vulnerable to earnings at the moment.
Everything is being driven by earnings," said Bernard McAlinden,
investment strategist at NCB Stockbrokers.
The UK's FTSE 100 index was down 1.2 percent, Germany's DAX
was 1.05 percent lower and France's CAC 40 was up 0.8 percent.
Traders and analysts said investors were showing greater
confidence although caution prevailed.
"The mood is better, but there is a developing dichotomy
between those that are becoming emboldened by the market and
others that are more worried about an impending recession," said
Hans-Juergen Delp, investment strategist at Commerzbank.
FRENCH BANKS GAIN
French banking stocks were the top gainers in Europe after
France outlined plans to lend 10.5 billion euros to the
country's top six banks before year-end to prop up their capital
reserves. []
BNP Paribas, Societe Generale and Credit Agricole were up
between 7.4 and 15.7 percent.
However, UK groups HSBC <HSBA.L> and Royal Bank of Scotland
<RBS.L> were down between 3.5 and 6.15 percent after gaining on
Monday.
Mining stocks were among the top weighted gainers in Europe.
Xstrata <XTA.L> jumped 3.3 percent on market talk that
Brazil's Vale <VALE5.SA.> was interested in building a near 30
percent stake in the group.
Xstrata declined to comment.
Vedanta Resources <VED.L>, Rio Tinto <RIO.L>, Eurasian
<ENRC.L> and Lonmin <LMI.L> were 0.6-5.3 percent higher.
"U.S. Federal Reserve Chairman Ben Bernanke's speech
yesterday that a second stimulus plan should help reflate
economies could also be giving mining stocks a boost," said
McAlinden.
However, commodity stocks were lower as the oil price <CLc1>
retreated 5.8 percent.
BP <BP.L> was down 1.7 percent and Royal Dutch Shell
<RDSb.L> was 0.5 percent lower.
Switzerland's Richemont <CFR.VX> gained over 38 percent
after the group traded for its first day as a pure luxury play
following the spin off of its stake in British American Tobacco
<BATS.L>. []
The FTSEurofirst 300 has lost nearly 40 percent so far this
year, punctured by a credit crisis that has piled up the losses
at banks and slowed the economy.
The index is on track in October for its worst month since
September 2002.
(Additional reporting by Tyler Sitte in Frankfurt; Editing by
Paul Bolding)
