* FTSEurofirst 300 index ends down 1.5 pct
* Deutsche Bank, Deutsche Post fall on stake talk
* Energy stocks recover as crude gains
By Joanne Frearson
LONDON, Jan 13 (Reuters) - European shares ended lower on
Tuesday as investor concern intensified about the scale of the
economic slowdown, with financials leading the index lower.
The pan-European FTSEurofirst 300 <> index of top
European shares closed off 1.5 percent at 840.36 points, having
sunk as far as 828.68 points.
"Markets are pricing in a greater European slowdown than
perhaps imagined towards the end of last year and are selling
off," said Peter Dixon, UK economist at Commerzbank.
"I think it is a realisation that the data flow over the
last few weeks has been universally awful out of Europe," Dixon
said.
European stocks came off lows as a Democratic congressional
aide said that U.S. President-elect Barack Obama planned to urge
Senate Democrats to back his request for the remaining $350
billion from the financial industry bailout. []
Earlier, Federal Reserve Chairman Ben Bernanke said the
government could consider buying troubled assets, providing
asset guarantees or setting up a so-called bad bank to take over
assets in exchange for cash and equity. []
"The speech was nothing that had not been heard before,"
said Dixon.
Banks led the losers on the index. Barclays <BARC.L>, RBS
<RBS.L> and Lloyds TSB <LLOY.L> were down 5.4-10.1 percent.
"UK banks have rallied in expectation of the next leg of
Government support which is imminent but we stay with the view
that the scale and pace of deterioration in the UK economy ...
suggests that the risk of further capital being required remains
significant," NCB Stockbrokers said.
Deutsche Bank <DBKGn.DE> fell back 0.9 percent on talk that
Deutsche Post <DPWGn.DE> - down 6 percent - could take a stake
in the group as part of a deal to complete the sale of Deutsche
Postbank <DPBGn.DE>, a source with direct knowledge of the
matter said. []
Deutsche Postbank soared 11.7 percent. Post and Deutsche
Bank declined to comment.
Fortis <FOR.BR> gained nearly 18 percent on market talk that
the Belgian government was set to buy the remains of the
troubled financial services group.
The insurance sector were also heavyweight losers on the
index. A Citigroup analyst said that a sale of assets by
American International Group <AIG.N>, once the world's biggest
insurer by market value, to repay debt holders could leave
little value for common stockholders. []
Axa <AXAF.PA>, Allianz <ALVG.DE> and RSA Insurance Group
<RSA.L> were down 3.4-4.85 percent.
ENERGY STOCKS RISE AS CRUDE RECOVERS
Energy stocks recovered from earlier losses as crude <CLc1>
gained 3.35 percent, having earlier touched a three-week low.
BG Group <BG.L>, ENI <ENI.MI> and Royal Dutch Shell <RDSb.L>
were up 0.1-1.6 percent.
Drug makers were on the rise as investors turned to the
safety of defensive stocks.
Roche <ROG.VX>, Sanofi-Aventis <SASY.PA> and Shire <SHP.L>
were 1.2-2.3 percent higher.
European aerospace group EADS <EAD.PA> rose 1.8 percent
after the company said it had abandoned a "significant" defence
acquisition in the United States to conserve cash and prop up
Airbus plane sales to crisis-hit airlines. []
Actelion <ATLN.VX> gained 6 percent after Credit Suisse
raised their price target on the stock to 74 francs from 67.
Across Europe, the FTSE 100 <> index was down 0.6
percent, Germany's DAX <> was 1.75 percent lower and
France's CAC 40 <> was down 1.5 percent.
(Additional reporting Peter Starck; Editing by David Cowell)
