* FTSEurofirst 300 ends 0.7 pct lower
* Banks among top losers; Lloyds sheds 8.5 pct
* Automakers skid on falling sales, broker downgrades
By Atul Prakash
LONDON, April 7 (Reuters) - European shares ended lower for
a third straight session on Tuesday as financials slipped ahead
of the earnings season on renewed worries about their balance
sheets, while autos skidded on poor sales and broker downgrades.
The FTSEurofirst 300 <> index of top European shares
closed 0.7 percent lower at 760.69 points. The index has fallen
9 percent so far this year after plunging 45 percent in 2008.
Banks were among the biggest losers on the index, with
Standard Chartered <STAN.L> down 6.3 percent, Lloyds <LLOY.L>
slipping 8.5 percent, Societe Generale <SOGN.PA> falling 2
percent, and UBS <UBSN.VX> shedding 5.2 percent.
"It looks to be premature to call the bottom even if the
rate of descent and deterioration has seemingly slowed. We
clearly remain in a bear market where sharp bear market rallies
can occur," said Jonathan Lawlor, head of European research at
Fox-Pitt, Kelton.
"There are still a number of major outstanding question
marks on what the authorities are going to do to mend the
banking system," he added.
Financial stocks came under pressure after veteran analyst
Mike Mayo of Calyon Securities predicted the banking sector's
problems had further to run, and billionaire investor George
Soros told Reuters Financial Television on Monday the whole
banking system "is basically insolvent".
New forecasts from the International Monetary Fund are also
set to suggest that toxic debts racked up by banks and insurers
could spiral to $4 trillion, the Times reported. []
Energy shares were down, tracking crude prices that fell 2.6
percent. BP <BP.L>, BG Group <BG.L>, Tullow Oil <TLW.L>, Total
<TOTF.PA>, Royal Dutch Shell <RDSb.L> and StatoilHydro <STL.OL>
shed between 1.2 and 3.1 percent.
Across Europe, the FTSE 100 <> index was down 1.6
percent, Germany's DAX <> slipped 0.6 percent and France's
CAC 40 <> was 0.9 percent lower.
NERVOUS INVESTORS
Investors remained nervous ahead of the corporate results
season, which is expected to be weak amid the worst credit
crisis since the Great Depression of the 1930s.
A constant flow of bleak economic data is forcing investors
to remain defensive. Revised figures showed the euro zone
economy shrank more than earlier estimated in the fourth quarter
of 2008, pointing to an even worse 2009 figure and dragging the
euro down against the dollar <EUR=>.
British industrial output suffered its biggest annual drop
in February since records began 40 years ago, while Royal Bank
of Scotland said it could shed up to 9,000 jobs in two years.
"Looking ahead, first-quarter results out of the U.S. next
week may provide world markets with direction, but for now at
least, there is more of the telltale weakness to which we have
become so accustomed," said Anthony Grech, strategist, IG Index.
Auto stocks slipped on falling sales numbers and as the
sector outlook remained grim. BMW <BMWG.DE> fell 4.4 percent
after it said its global vehicle sales in March were down 17.2
percent. Downgrades by RBS and Nomura also weighed on the stock.
Daimler <DAIGn.DE> dropped 1.5 percent after its
Mercedes-Benz Cars said global deliveries fell in March. Fiat
<FIA.MI> lost 0.5 percent, Renault <RENA.PA> fell 3.9 percent,
and Peugeot <PEUP.PA> declined 4.1 percent.
However, defence stocks were up after the U.S. defence
budget raised its funding for the F-35 joint strike fighter jet.
Part-builder BAE Systems <BAES.L> was up 5.8 percent. Peers
Cobham <COB.L> rose 2.2 percent, and Ultra Electronics <ULE.L>
rose 1.3 percent.
"BAE is the big beneficiary; it builds around 20 percent of
the F-35," Evolution analyst Nick Cunningham said.
(Editing by Will Waterman)
