* FTSEurofirst 300 down 1.7 percent
* Autos sharply lower after Toyota profit warning
* BNP falls on fears of rights issue
* Irish banks rise on bailout
By Sitaraman Shankar
LONDON, Dec 22 (Reuters) - European shares fell early on
Monday, putting them on track for their seventh day of losses in
eight, as banks, autos and oils led losers and volumes were
expected to stay thin in Christmas week.
At 0913 GMT, the FTSEurofirst <> index of top European
shares was down 1.7 percent at 809.25 points. The benchmark has
fallen 46 percent this year, hit by a credit crisis that piled
up losses at top banks and tipped economies into recession.
"It's a grey and misty winter morning, with a morose feeling
around markets," said Justin Urquhart Stewart, investment
director at Seven Investment Management.
"People can't see where the turnaround is going to come from
-- the one piece of good news is that most of the bad news has
been discounted," he said.
Banks were broadly weaker, with UniCredit <CRDI.MI> 3.8
percent lower and Santander <SAN.MC> off 2.5 percent.
Shares in French bank BNP Paribas <BNPP.PA> dropped as much
as 5.3 percent to their lowest level since Oct 2002, to figure
among the biggest losers on the FTSEurofirst 300 <> index
of top European shares, with traders citing renewed fears of a
capital increase if BNP does not buy Fortis.
BNP CEO Baudouin Prot told Les Echos that the bank does not
need a capital increase if its offer for Fortis fails.
Oil shares were also lower, with Total <TOTF.PA> off 2
percent and Royal Dutch Shell <RDSa.AS> down 1.1 percent. Crude
<CLc1> hovered around $43 a barrel, a far cry from levels of
$147 seen in July, and a sign of a slowing global economy.
Auto shares were also sharply lower after Toyota <7203.T>,
the world's biggest automaker, forecast its first-ever group
operating loss due to a relentless global slide in car sales and
a crippling rise in the yen. [].
Volkswagen <VOWG.DE>, whose shares have endured wild swings
this year amid a stake build by Porsche <PSHG_p.DE> and a short
squeeze, fell 8.6 percent. BMW <BMWG.DE>, Daimler <DAIGn.DE>,
Peugeot <PEUP.PA> and Renault <RENA.PA> fell 2-3.7 percent.
French tyremaker Michelin <MICP.PA> fell 4.5 percent after
its said it was cutting back operations to cope with a decline
in demand for tyres and faced costs of nearly 150 million euros
($209.4 million).
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC <> were off 1-2.1 percent.
BAILOUT LIFTS IRISH BANKS
Irish banks rose sharply on a decision by the government to
inject 5.5 billion euros into them with the state taking
majority control of Anglo Irish Bank <ANGL.I>.
Anglo Irish rose as much as 20 percent, while Bank of
Ireland <BKIR.I> soared 36 percent and Allied Irish Banks
<ALBK.I> jumped 21 percent.
A lifeline was also responsible for a sharp rise in shares
of German chipmaker Infineon <IFXGn.DE>. The stock jumped 12
percent to top German gainers after its struggling Qimonda
<QI.N> unit got a 325 million euro loan and the option to tap
into federal aid.
But the overall mood was decidedly bearish, with 259 of the
311 companies on the FTSEurofirst 300 trading lower.
The index is on track this year for its biggest fall on
record. It posted rises of between 12 and 22 percent in the four
years of the stock bull run of 2003-2007, and eked out a 1.6
percent gain last year.
A year-end rally has not materialised this year, and the
index is down more than 6 percent in December.
(Editing by Victoria Bryan)
