* FTSEurofirst 300 <> falls 0.2 percent
* Banks weak; Obama proposes new regulations
* General Electric fourth-quarter earnings eyed
By Harpreet Bhal
LONDON, Jan 22 (Reuters) - European shares edged down in
early trade on Friday, extending losses to a third straight
session, with banks under pressure after U.S. President Barack
Obama proposed tough new regulations on the sector.
By 0932 GMT, the pan-European FTSEurofirst 300 index
<> shed 0.2 percent at 1,034.38 points, after closing 1.6
percent lower in the previous session -- the lowest close since
December 22.
Banks were among the biggest decliners in Europe, after
Obama said banks should no longer be allowed to own, sponsor or
invest in hedge funds for proprietary profit. []
Barclays <BARC.L>, HSBC <HSBA.L>, BNP Paribas <BNPP.PA>,
Societe Generale <SOGN.PA> and Deutsche Bank <DBKGn.DE> were off
0.4 to 4.2 percent.
"We have to digest that the reception in the last trading
session in the U.S. to the Obama plan was very negative in the
financial space and this has provoked some risk aversion across
the board," said Gerhard Schwarz, head of global equity strategy
at UniCredit in Munich.
Overnight on Wall Street shares suffered their worst one-day
percentage drop since October as major banking stocks slid.
Shares in Asia also slipped, with Japan's Nikkei average <>
hitting a three-week closing low.
"The markets have seen a decent spike in implied volatility,
and from that we can expect to see more see-sawing today,"
Schwarz said.
The VDAX-NEW volatility index <.V1XI>, a measure of investor
risk appetite, after jumping 10 percent in the previous session,
was down 0.3 percent in early European trade. The higher the
index, the more risk averse equity investors are.
Later in the session investors will await fourth-quarter
results from U.S. company General Electric <GE.N> for further
signs on the health of U.S. corporations.
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC 40 <> lost 0.1 to 0.4 percent.
Mining stocks were higher, rebounding from sharp falls in
the previous session, although lower metals prices were seen
capping gains.
Anglo American <AAL.L>, BHP Billiton <BLT.L>, Lonmin
<LMI.L>, Rio Tinto <RIO.L> and Xstrata <XTA.L> rose 0.1 to 0.7
percent.
GOOGLE PRESSURED
Google Inc <GOOG.O> became one of the first of the
technology companies to shake off the recession last year as it
posted fourth-quarter earnings, but the Internet firm's results
failed to satisfy investor's increasing demand for stronger
growth. []
Among individual movers, cellphones chipmaker Sony Ericsson,
owned by Sweden's Ericsson <ERICb.ST>, rose 2.3 percent after it
posted losses within expectations. The company, however, offered
a cautious view on 2010 market conditions. []
Telecom Italia <TLIT.MI> rose 4.5 percent. Investment bank
Mediobanca <MDBI.MI> is studying a possible holding vehicle for
Spain's Telefonica <TEF.MC> and Spanish holding company Criteria
that could allow Telefonica to launch an all-shares takeover bid
for Telecom Italia, la Repubblica said.
(Editing by Mike Nesbit)
