* FTSEurofirst 300 falls to lowest close since May 2003
* BASF slips after profit warning
* Commodity stocks track weaker crude, metals prices
By Atul Prakash
LONDON, Nov 19 (Reuters) - European stocks fell to a
5-1/2-year closing low on Wednesday, led down by banks and
commodities on concerns over a deep recession, while profit
worries punctured BASF <BASF.DE> and AstraZeneca <AZN.L>.
BASF, the world's top chemicals maker by revenue, underlined
worries about global demand by cutting its 2008 profit outlook
for the second time in two months. It said it would cut back
production, citing a "massive" demand drop.
BASF shares were down 13.7 percent, while drugmaker
AstraZeneca slid 11 percent after it said full-year earnings
would be at the lower end of its previously stated range.
The FTSEurofirst 300 <> index of top European shares
closed 4 percent lower at 811.99 points -- the lowest close
since May 2003. The benchmark has fallen more than 45 percent
this year, compared with gains in the previous five years.
Banks were the worst hit on Wednesday, with BNP Paribas
<BNPP.PA> shedding 11.2 percent, HSBC <HSBA.L> falling 9.1
percent, Barclays <BARC.L> down 13.3 percent and Societe
Generale <SOGN.PA> declining 7.8 percent.
HBOS <HBOS.L>, however, gained 2 percent as Lloyds TSB
<LLOY.L> investors were expected to approve its takeover of HBOS
and a government rescue plan, but the UK bank's executives faced
a grilling from unions about the potential for up to 50,000 job
cuts due to a deteriorating economic outlook. []
"The outlook is still very poor and the profit warning from
BASF didn't help sentiment," said Edmund Shing, strategist at
BNP Paribas in Paris.
"Everyone is staying very defensively positioned and no one
is seeing any reason to become more aggressively positioned in
risky assets like equities," said Shing.
Gloomy economic data continued to pour in, raising concerns
about a prolonged global recession, dampening sentiment and
forcing investors to trade cautiously in volatile markets.
U.S. consumer prices dropped at the fastest rate on record
in October, new home construction touched a record low and loans
for purchases of single-family homes fell to their lowest level
in nearly eight years.
A report showed British firms were at their most gloomy
about future production levels for nearly three decades.
Analysts said Britain's economy was rapidly sliding into its
first recession since the early 1990s.
Many economists think the U.S. economy is already in
recession even though one has not yet been formally declared. A
severe global credit crunch that has sapped demand for
commodities and hurt consumers has already driven parts of
Europe and Japan into recession.
ENERGY WEAK, MINERS SLIP
Miners tracked weaker metals prices. 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 6 and 18 percent.
Mining shares suffered as crude oil's decline deepened to
below $54 a barrel, pressured by economic weakness that will
further erode the world's demand for fuel.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, gas producer BG Group
<BG.L> and Tullow Oil <TLW.L> shed between 3.7 and 5.9 percent.
"In the short term there could be a rally, but in the long
term cash is king, and investors should buy defensive stocks,"
said Philippe Gijsels, strategist at Fortis in Brussels.
German solar energy company SolarWorld <SWVG.DE> tumbled 19
percent after it said it was prepared to acquire cash-strapped
carmaker Opel's plants in Germany, but analysts dismissed the
plan as unrealistic. []
UniCredit's <CRDI.MI> Bank Austria was close to selling for
1.2 billion euros profit-sharing rights in a vehicle that owns
stakes in Austrian industrial firms, the Der Standard daily
reported on Wednesday. Its shares were up 0.1 percent.
Across Europe, the FTSE 100 <> index was down 4.8
percent, Germany's DAX <> was 4.9 percent lower and
France's CAC 40 <> was down 4 percent.
(Additional reporting by Sitaraman Shankar)
