* FTSEurofirst 300 ends at lowest close since mid-March
* Weak U.S. consumer confidence data weighs on sentiment
* Recently-hammered banking stocks stage late recovery
By Blaise Robinson
PARIS, June 24 (Reuters) - European shares ended lower on
Tuesday on renewed worries over the outlook for the U.S.
economy, but a late recovery in recently hammered banking shares
helped the market close off the session's lows.
It was the market's fourth retreat in five sessions as weak
consumer confidence data and a profit warning by U.S. package
delivery company United Parcel Service <UPS.N> added to the
gloom.
The FTSEurofirst 300 <> index of top European shares
ended 0.7 percent lower at 1,214.25 points, its lowest close
since mid-March. The index has lost around 9 percent so far this
month.
The Conference Board said its overall monthly measure of
consumers' mood declined to 50.4 this month -- the lowest since
47.3 in February 1992 -- from a revised 58.1 in May. Economists
on Wall Street had been expecting a reading of 56.4, according
to a Reuters poll.
"Worries over a slowdown have spread from financial market
professionals to people in the real economy, and it confirms
what the market has been fearing for a while," said Jean-Claude
Petit, head of equities at Barclays Wealth Managers France.
"The real danger is to face a clear economic downturn and
earnings erosion, without having room for interest rate cuts
because of high inflation," he said.
An interest rate decision by the U.S. Federal Reserve is
expected on Wednesday.
The Fed, which has slashed interest rates by 2.25 percentage
points so far this year, is expected to keep rates steady at 2
percent. But the focus will be on the Fed's statement, as
investors look for insight on the outlook for rates.
Earlier this month, the European Central Bank took the
markets by surprise by leaving the door open to a rate hike in
July to keep inflation at bay.
Banking stocks staged a late recovery on Tuesday, tracking
gains by their U.S. peers on Wall Street. Royal Bank of Scotland
<RBS.L> gained 2.2 percent, Barclays <BARC.L> rose 3.7 percent
and BNP Paribas <BNPP.PA> added 2 percent.
The DJ Stoxx European banking index <.SX7P> is down about 31
percent in the year-to-date on investor concerns over the impact
of a credit crisis on the banks' balance sheets.
Shares in auto and tyre makers were among the biggest losers
in Europe, with Renault <RENA.PA> down 1.6 percent, BMW
<BMWG.DE> down 3.4 percent, Porsche <PSHG_p.DE> down 3.8 percent
and Michelin <MICP.PA> down 0.6 percent, on fresh fears over raw
material prices, ongoing worries over the outlook for the U.S.
market, and the rising euro.
A strong euro makes it more expensive for car makers to
export from Europe, and reduces U.S. revenues when translated
into euros.
"Recent news has not been good and the explosion of raw
material prices, especially oil, is causing the fall," Ixis
analyst Georges Dieng said.
Toyota Motor Corp <7203.T> said on Tuesday it would be very
difficult to hit its annual U.S. sales target, hinting that it
could cut its forecast when it reviews its estimates next month.
Cooper Tire & Rubber Co <CTB.N> said late on Monday it has
reduced production in its North American facilities during the
second quarter to counter reduced tire demand and projected
shortages of certain raw materials.
Germany's DAX index <> ended down 0.8 percent, the
UK's FTSE 100 index <> down 0.6 percent and France's CAC 40
<> down 0.8 percent.
Electrical retailer Kesa <KESA.L> sank 10 percent after the
company warned sales growth has slowed after a strong end to the
last financial year and it deferred plans to return cash to
shareholders amid worsening trading conditions.
The warning knocked sentiment on other UK retailers, with
Carphone Warehouse <CPW.L> down 3.4 percent and DSG
International <DSGI.L> down 9.7 percent.
(Additional reporting by Jessica Mead; Editing by Paul Bolding)
