* FTSEurofirst 300 falls 0.8 pct, trimming Wednesday's gains
* Ifo German business sentiment index disappoints
* Energy shares fall along with oil
* Banks rise after Credit Suisse's Q2 result beats forecasts
By Patrizia Kokot
LONDON, July 24 (Reuters) - European shares indexes fell in
early trade on Thursday, trimming some of the previous session's
strong gains after disappointing economic data and as energy
stocks dropped along with oil prices.
But the losses were limited by a rally in banking stocks
after Credit Suisse <CSGN.VX> beat expectations with its
second-quarter earnings report, sending its shares up 5.1
percent.
By 0849 GMT the FTSEurofirst 300 index <> was down
0.8 percent at 1,180.02 points, having earlier risen to as high
as 1,194.54 points. The index gained 2 percent on Wednesday.
"The decline in crude is weighing on the oil stocks but what
is really dreadful is the economic data," said Mic Mills, a risk
trader at Tradindex, pointing to the Ifo German corporate
sentiment index, which came in well below expectations.
"In history the crash of Ifo expectations was followed by
lower earnings expectations for the following business year,"
said strategist Andreas Huerkamp at Commerzbank in Frankfurt.
The Euro zone flash purchasing managers index (PMI) for
July also failed to meet expectations as French business
confidence dropped to its lowest level in three years.
Commodities were the largest drag on the index as oil <CLc1>
traded below $125 a barrel. BP <BP.L> and Total <TOTF.PA> shed
0.7 and 1.4 percent respectively.
Banks on the other hand extended a 6.2 percent rally seen on
Wednesday in the DJ Stoxx banking sector index <.SX7P> and added
0.3 percent. Credit Agricole <CAGR.PA> gained 3.2 percent and
Deutsche Bank <DBKGn.DE> rose 1.5 percent.
"Credit Suisse has reclaimed its status as a survivor of the
credit crisis. Positive results in the investment banking
segment, while humble, underscore that the one bank model has a
future at Credit Suisse," said Isabel Schauerte, an analyst at
Celent, in a note.
Morgan Stanley upgraded the European banking sector to
"in-line" from "cautious" and said some 40 percent of the banks
it covers are now either below or no more than 10 percent above
its bear case valuations.
Across Europe, Britain's FTSE <> was down 0.8 percent,
Germany's DAX <> fell 0.4 percent and France's CAC <>
lost 0.6 percent.
ABB, STORA ENSO DISAPPOINT
In the FTSEurofirst 300 index, decliners outnumbered
advancers roughly by two to one with engineering groups among
prominent fallers after investors took profits in ABB <ABBN.VX>
despite solid results from the Swiss group. The stock shed 5.5
percent.
And paper and board maker Stora Enso <STERV.HE> lost 7.3
percent after the company reported a lower than expected
second-quarter operating profit and gave a cautious outlook.
Banco Popular <POP.MC> traded 7.2 percent lower as its
first-half figures also fell short of expectations, with the
results reflecting the bank's exposure to the two largest
property failures in Spain.
Among the gainers, Nokia <NOK1V.HE> added 1.6 percent after
the Finnish handset maker signed a patent agreement with
Qualcomm <QCOM.O>, ending three years of legal battles.
Some other earnings reports also impressed with Syngenta
<SYNN.VX> rising 4.7 percent as it raised its outlook for 2008
and 2009.
(Editing by Greg Mahlich)
