* FTSEurofirst 300 index falls 1.25 percent
* Banks leading losers, tracking Wall Street trend
* Carrefour, Wienerberger sink after trading updates
By Sylvia Westall
FRANKFURT, July 10 (Reuters) - European shares fell on
Thursday as concern about the likelihood of yet more losses
among financials dented banking stocks, while uncertainty about
global economic growth weighed on the broader market.
In the energy sector, BP <BP.L> lost 1.2 percent, while
total <TOTF.PA> fell 1.4 percent and Royal Dutch Shell <RDSa.AS>
shed 2.2 percent. U.S. inventory data on Wednesday showed a
surprise rise in gasoline stocks, suggesting consumer demand is
starting to decline. Crude futures <CLc1> were up at $136.50 a
barrel.
Banks Banco Santander <SAN.MC>, UBS <UBSN.VX> and Royal Bank
of Scotland <RBS.L> were among the biggest individual drags on
the broader European market, as investor worries over the
chances of more writedowns or further capital raising persisted.
At 0904 GMT the FTSEurofirst 300 index was 1.2 percent down
at 1,167.57 points. It has lost almost 23 percent this year.
"The old problems are still the new ones. People said that
with the rescue of Bear Stearns (in mid-March), this was the
beginning of the end. What rubbish! We see now that we are only
at the end of the beginning. This is to be continued," Lang &
Schwarz analyst Giuseppe-Guido Amato said.
Belgian-Dutch financial services group Fortis <FOR.BR>
<FOR.AS> shed as much as 2 percent after the board said it would
meet on Friday to discuss problems with angry investors. A
Belgian newspaper said Chief Executive Jean-Paul Votron will
step down.
Adding to existing fears among investors of a deterioration
in consumer spending -- the lifeblood of many major economies --
was a series of pessimistic updates from a number of big
retailers.
French supermarket Carrefour <CARR.PA> fell over 8 percent,
hitting its lowest in five years after the company, the world's
second largest retailer, posted second-quarter sales that showed
clear signs of a slowdown in consumer spending.
Shares in Associated British Foods <ABF.L>, the owner of
discount fashion chain Primark, fell nearly 4 percent after it
posted a 24 percent rise in group third-quarter sales, but a
slowing in underlying growth at Primark.
BOE DECISION TIME
Investors will be watching the Bank of England, which is
widely expected to hold interest rates at 5 percent at 1100 GMT,
as it juggles a slowing economy with high inflation.
Around Europe, Austrian brickmaker Wienerberger <WBSV.VI>
dropped some 19 percent after issuing a profit warning due to a
collapse in residential construction in Britain and a
contraction in the United States.
Other construction-related stocks declined after a Credit
Suisse note suggested Saint-Gobain <SGOB.PA>, Italcementi
<ITAI.MI> and Holcim <HOLN.VX> were at risk of issuing profit
warnings. Shares in the three fell 1.3-3.6 percent.
"Recent economic news flow reinforces our view that the
credit crisis will have a lasting effect on the banking sector's
profitability, including France," Credit Suisse said in a note
on French banks.
It cut its target prices for Credit Agricole <CAGR.PA>
Societe Generale <SOGN.PA> and BNP Paribas <BNPP.PA> by between
20 and 40 percent.
Aerospace group EADS <EAD.PA>, the parent of Airbus, fell as
much as 4.6 percent after the U.S. airforce reopened an aerial
tankers tender which had initially picked Northrop Grumman
<NOC.N> and EADS over Boeing <BA.N>.
Germany's DAX <> fell 0.8 percent, France's CAC index
<> dropped 1.5 percent and Britain's FTSE 100 <> shed
1.2 percent.
In economic data, French industrial output fell by more than
expected in May. "The manufacturing outlook in France is
deteriorating sharply, and risks remain clearly skewed to the
downside," Morgan Stanley said in a note.
"The strength of the euro, high input prices, and the
tightening of credit conditions are taking their toll on the
French economy. This is also the case in the other euro area
countries," Morgan Stanley said.
Other stocks on the move included French engineer Alstom
<ALSO.PA>, down more than 5 percent after Morgan Stanley started
coverage of the stock with an "underweight" rating.
