* FTSEurofirst 300 down 1.4 pct
* Financials decline, euro touches 2-mth low
* Energy shares down as crude prices slip
By Atul Prakash
LONDON, Feb 17 (Reuters) - European shares hit a two-week
low in morning trade on Tuesday, as banks slid on persistent
concerns about their balance sheets and fears they might need
more state help, while weaker crude prices pressured oil stocks.
At 0936 GMT, the FTSEurofirst 300 <> index of top
European shares was down 1.4 percent at 773.98 points after
touching a low of 770.89. It closed 1.4 percent lower on Monday.
The index has fallen five times in the previous six sessions
and is down 6.9 percent so far this year after plunging 45
percent in 2008.
Banks were the biggest sectoral decliner on the index, with
Societe Generale <SOGN.PA> down 9 percent, KBC Groep <KBC.BR>
falling 8.8 percent, Deutsche Bank <DBKGn.DE> shedding 5.4
percent and UniCredit CRDI.MI> down 5.8 percent.
Concerns over a recession in eastern Europe and the knock-on
effect on European banks helped the dollar to rise broadly,
while the euro hit a more than two-month low.
Shares in Daimler <DAIGn.DE>, which makes Mercedes Benz
cars, fell more than 7 percent after it stopped short of giving
a profit forecast for this year after delivering a
fourth-quarter loss, weighed down by significant losses and
charges at Chrysler.
The stock later pared losses and was down 0.6 percent.
"The beginning of a new year brought with it understandable
optimism, but as we move further in to 2009, it is becoming
clear that the green shoots of recovery are becoming harder and
harder to find," said Chris Hossain, senior sales manager at ODL
Securities Ltd.
"The damning numbers form Japan have sent shockwaves through
Europe and the U.S., with concerns still at the forefront of
investors minds on just how bad things are," he added.
Data showed on Monday that Japan's economy shrank by 3.3
percent in the fourth quarter, its worst since the 1974 oil
crisis, while a Reuters poll showed on Tuesday that confidence
among Japanese manufacturers stayed near record lows.
Investor sentiment remained downbeat in spite of governments
around the world pledging hundreds of billions of dollars to
shore up bank capital, cut taxes and fund projects that will
create jobs, while central banks have pumped funds into the
money markets and slashed interest rates.
U.S. Secretary of State Hillary Clinton said the global
crisis demanded a coordinated response, while U.S. President
Barack Obama was to sign a $787 billion stimulus package.
ENERGY SHARES SLIP
Energy stocks were under pressure as crude oil prices <CLc1>
fell 1.4 percent. BP <BP.L>, Royal Dutch Shell <RDSb.L>, Repsol
<REP.MC>, Total <TOTF.PA> and StatoilHydro <STL.OL> shed between
0.8 and 1.2 percent.
Britain's BG Group <BG.L> was down 0.5 percent. The company
raised its bid for Australian coal seam gas firm Pure Energy
<PES.AX> by 25 percent to nearly $650 million, trumping a rival
offer by Royal Dutch Shell's <RDSa.L> Australian partner, Arrow
Energy Ltd <AOE.AX>.
However, InterContinental Hotels <IHG.L>, the world's
largest hotelier, rose 1.5 percent after it met forecasts with a
13 percent rise in 2008 profit. But the company said a marked
fourth-quarter slowdown had continued into 2009 and demand was
still easing.
"Weighing up the increasingly challenging outlook against
the group's still perceived long term growth prospects and
relatively defensive business model, market consensus opinion
currently suggests a neutral investment stance remains
appropriate," said Keith Bowman, analyst at Hargreaves Lansdown
Stockbrokers.
Across Europe, the FTSE 100 index <>, Germany's DAX
<> and France's CAC 40 <> were 1.3-1.0 percent lower.
(Editing by Simon Jessop)
