* FTSEurofirst 300 falls 0.8 percent in early trade
* Banks drop after JPMorgan's <JPM.N> news on fresh losses
* Mining shares recover along with metal prices
By Blaise Robinson
PARIS, Aug 13 (Reuters) - European equities fell in early
trade on Wednesday, losing ground for the second day in a row as
banking shares tracked declines suffered by their U.S. peers
overnight on rekindled worries over credit losses.
But the losses were limited by gains in mining stocks,
recovering from recent sharp losses along with metal prices.
Rio Tinto <RIO.L> rose 2.7 percent, Xstrata <XTA.L> added
4.1 percent and BHP Billiton <BLT.L> gained 2.9 percent.
At 0811 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.9 percent at 1,198.55 points. The
index lost 0.3 percent on Tuesday.
U.S. banking shares tumbled overnight on news that JPMorgan
Chase <JPM.N> has racked up $1.5 billion of losses so far this
quarter on mortgage-linked assets, sending its stock down more
than 9 percent.
Goldman Sachs <GS.N> also weighed after a number of analysts
cut their earnings estimates for the investment bank, sending
its stock down 6 percent.
Royal Bank of Scotland <RBS.L> dropped 4.4 percent, Societe
Generale <SOGN.PA> sank 5 percent, Credit Suisse <CSGN.VX> shed
2.7 percent, and Banco Santander <SAN.MC> fell 2.3 percent.
Dutch financial group ING <ING.AS> fell 0.5 percent after
posting a quarterly net profit that beat estimates.
"Credit fears are rising again after the news from JPMorgan.
It started yesterday in Europe, and with the fall on Wall Street
overnight, that will weigh today," said Benoit De Broissia,
analyst at Richelieu Finance, in Paris.
Banking shares have been hit over the past year by fears
over the impact of a debacle in the risky U.S. subprime mortgage
market that has forced financial institutions to unveil massive
asset writedowns and arrange emergency capital injections.
The DJ Stoxx banking index, down 2.9 percent on Wednesday,
has lost 29 percent so far in 2008, the worst performance among
European sectors.
The broad FTSEurofirst 300 is down 20 percent so far this
year, but has gained nearly 10 percent since reaching a floor in
mid-July, helped by a sharp drop in oil prices and a weakening
euro versus the U.S. dollar, which makes it easier for European
exporters such as industrial firms and automakers.
RECESSION FEARS
But economic concerns are rising. Japanese shares fell
sharply on Wednesday on data that showed Japan's economy
contracted in the second quarter at its sharpest rate in seven
years, fuelling fears that the world's No.2 economy has slipped
into a recession.
"To really get a sustainable rally, macroeconomic worries
would have to ease. But it doesn't look like this will happen
soon, at least not in Europe where people have started to talk
about recession in a number of countries," Richelieu Finance's
De Broissia said.
Quarterly GDP figures for the eurozone are expected on
Thursday morning, but investors will first look into U.S. retail
sales data for July, due on Wednesday at 1230 GMT, to see if the
recent sharp drop in oil prices has helped revive consumer
spending.
Dallas Federal Reserve Bank President Richard Fisher added
to negative sentiment on Tuesday by saying the U.S. economy was
in a prolonged period of slow growth and could shrink later this
year.
(Editing by David Cowell)
