* FTSEurofirst 300 index down 0.3 pct
* Financials fall on writedown fears
* Oils rebound as crude hovers around $42 a barrel
By Joanne Frearson
LONDON, Jan 23 (Reuters) - European shares ended weaker on
Friday, retreating for the 12th time over the past 13 sessions
to hit their lowest close in six years, dragged down by
financials as fears of more hefty losses in the sector deepened.
The pan-European FTSEurofirst 300 <> index of top
European shares ended down 0.3 percent at 760.54 points falling
to its lowest close since April 2003.
Banks took the most points off the index. Barclays <BARC.L>
fell 13.5 percent as concerns grew that the bank may require
further capital or be nationalised. []
"Sentiment is very fragile. People want to believe in
economic recovery and want to see some light at the end of the
tunnel, but they are finding it very difficult to see that when
you have got a banking system which is still experiencing severe
difficulties," said Darren Winder, strategist at Cazenove.
"Until they get the banking system into a situation where it
can fulfill its normal obligations to the real economy and
provide it with sufficient liquidity and credit, then I think
people are generally going to continue to feel very nervous
about the market," Winder said.
BNP Paribas <BNPP.PA>, Standard Chartered <STAN.L> and
Societe Generale <SOGN.PA> were down 5.75 percent to 7.8
percent.
Insurers were in the doldrums. Swiss Re <RUKN.VX> lost 19.2
percent on worries it could make further writedowns when it
reports full-year results on Feb. 19.
"Swiss Re is coming under pressure because of fears its has
critical amounts of CDS (credit default swaps) on its balance
sheet and that its hedges might not work," a trader said.
A Swiss Re spokeswoman said the company did not comment on
market rumours.
German chemical group Wacker Chemie <WCHG.DE> fell 4.8
percent following a gloomy outlook from U.S. peer MEMC
Electronic Materials <WFR.N> which forecast weak first-quarter
revenue.
Across Europe, the FTSE 100 <> index was up 0.01
percent, Germany's DAX <> was down 1 percent and France's
CAC 40 <> was down 0.7 percent.
OILS REBOUND
Energy stocks rebounded from earlier falls to top the index
risers as crude <CLc1> stayed above $42 a barrel.
BG Group <BG.L>, Royal Dutch Shell <RDSb.L> and Total
<TOTF.PA> were 1.5-2.8 percent higher.
Drug makers were also on the up. Germany's Merck KGaA
<MRCG.DE> surged 8.6 percent after it pulled ahead of Novartis
<NOVN.VX> in the race to develop the first pill for multiple
sclerosis.
"This is a very important drug for Merck, with expected
sales of more than 1 billion euros, which is boosting the share
price," a trader said.
AstraZeneca was up 3.6 percent as analysts expect it to
report strong fourth-quarter earnings on Jan. 29 boosted by
sales of cholesterol drug Crestor following good study results.
[]
Lift maker Kone <KNEBV.HE> soared 5.5 percent after the
group reported solid fourth-quarter earnings and said orders
came in as expected and targeted at least flat earnings and
sales in 2009. []
And Cintra <CCIT.MC> gained 3.7 percent after it said its 90
percent-owned consortium has won a highway contract in Poland
for a total investment of 2.1 billion euros. []
(Reporting by Joanne Frearson; Editing by Sharon Lindores)
(joanne.frearson@thomsonreuters.com; +44 207 542 2773,
Reuters Messaging:joanne.frearson.thomsonreuters.com@reuters.net)
