* FTSEurofirst 300 index ends down 1.3 percent
* Surging oil price on supply concern fuels growth fears
* Italian stocks such as ENI hit hard by exposure to Libya
* Hawkish comments from ECB bankers also weigh
By Simon Jessop
LONDON, Feb 21 (Reuters) - European shares fell sharply on
Monday after unrest in Libya fuelled concern over energy
supplies and sapped investor risk appetite, with Italian stocks
among the hardest hit.
A rise in the level of violence between protestors and the
government of autocratic Libyan leader Muammar Gaddafi over the
weekend prompted a broad-based share pullback across the region,
although volumes were a little light due to a U.S. holiday.
Fresh warnings on inflation from various European Central
Bank policymakers added to the bearish tone, after euro zone
private sector activity and German sentiment data pointed to a
robust recovery albeit with pricing pressures. []
The FTSEurofirst 300 <> index of leading European
shares ended down 1.3 percent at 1,171.41 points, after closing
Friday down 0.01 percent, but it remains up 4.4 percent on the
year. Volumes ended at 89 percent of the 30-day average.
The "elevated optimism that has built up over the last few
weeks" had pulled back on the "trigger" of rising tensions in
Libya and elsewhere in the Middle East, as well as the hawkish
ECB comments, Tammo Greetfeld, UniCredit strategist, said.
Brent crude's surge to a 2 1/2-year high on the Libya
tensions drove investor caution on growth fears, with chief
sector fallers including Italian oil and gas group ENI <ENI.MI>
and Austrian refiner OMV <OMVV.VI> hit by their ties to the
country.
OMV fell 4.2 percent on concern its supply of oil could be
affected, while ENI, which has extensive interests in the
country and has pledged to invest $25 billion there, fell around
5.1 percent.
Italian stocks exposed to Libya were among the top fallers
across Europe, with lenders UniCredit <CRDI.MI>, UBI Banca
<UBI.MI> and Intesa SanPaolo <ISP.MI>, and industrials such as
Finmeccanica <SIFI.MI> down between 2.5 percent and 5.8 percent.
The country's blue-chip FTSE MIB <.FTMIB> index ended down
3.6 percent, wiping 14 billion euros off its market
capitalisation in what was its worst session for eight months.
While Italian banking stocks were among the biggest fallers,
other peripheral euro zone lenders were also under pressure in a
2.7 percent weaker STOXX Europe 600 Banks <.SX7P> index, ahead
of the publication of the methodology for the European bank
stress test next week. []
Across Europe, meanwhile, Britain's FTSE 100 <> closed
down 1.1 percent, Germany's DAX <> ended down 1.4 percent
and France's CAC-40 closed 1.4 percent lower.
Not every stock was hurt by the Libya news, with gold and
silver stocks benefitting from a safe haven run-up in the
precious metals, led by a 4 percent gain for Randgold Resources
<RRS.L>. []
Peers Fresnillo <FRES.L> and Petropavlovsk <POG.L> also rode
the broad retreat from risk to help stem falls elsewhere in the
sector, particularly from the base metals-focused heavyweights.
In a fairly light day for corporate earnings, Danish brewer
Carlsberg <CARLb.CO> ended up 0.8 percent after reporting
quarterly earnings, while Merck KGaA <MRCG.DE> led gainers
across all sectors, up 4.5 percent after posting a jump in
profits. [] []
(Editing by Hans Peters)
