* FTSEurofirst 300 index falls 2.7 percent
* Fortis, Dexia slide; uncertainty about U.S.bailout
* Commodities track weaker crude, metal prices
By Joanne Frearson
LONDON, Sept 29 (Reuters) - European share prices fell
sharply early on Monday, as nationalisations and liquidity fears
hammered bank stocks and overshadowed prospects in the United
States of the $700 billion bailout plan for its banks going
ahead.
By 0856 GMT, the FTSEurofirst 300 index of top European
shares was down 2.6 percent at 1,075.90 points, having fallen
more than 3 percent earlier.
Belgian-Dutch group Fortis <FOR.BR> underwent
nationalisation on Sunday after emergency talks with European
Central Bank President Jean-Claude Trichet. []
Fortis is the first major euro zone bank to buckle since
U.S. mortgage defaults triggered global financial turmoil in
August last year.Its shares gave up early gains to slide 18
percent.
"The nationalisations have an incredibly negative readacross
for the sector," said Mark Sartori, head of European sales
trading at Fox-Pitt, Kelton.
"The contagion is spreading to mainland Europe and
everyone's asking: 'who's next?'" added Sartori.
The DJ Stoxx European banking sector index <.SX7P> fell
nearly 5 percent.
Fortis's Belgian-French rival Dexia <DEXI.PA> sank 23
percent following a Le Figaro newspaper report that said the
bank could launch an emergency capital increase.
A Dexia spokesman said that it continued to evaluate a
response to the current global financial crisis, offering no
comment on any capital increase. He said the company's liquidity
situation was totally healthy.
Germany's Commerzbank <CBKG.DE> was down 23 percent. This
was despite the group saying it has already covered group
refinancing needs for 2008.
Hypo Real Estate <HRXG.DE> plummeted 60 percent after it
secured a credit line of up to 35 billion euros ($51.21 billion)
from a consortium of listed and public-sector banks in Germany,
a source familiar with the situation said on Monday.
"This move will have significant impact on Hypo Real's
future profits. We are downgrading from "buy" to "hold" as an
initial step. Our estimates and target price are under review
until further details are disclosed," said Christoph Bossmann,
at WestLB.
Across Europe the FTSE 100 index was down 2.5 percent,
Germany's DAX was 3.1 percent lower and France's CAC 40 was down
3.3 percent.
BANKS, COMMODITIES IN A SEA OF RED
The UK government said that lender Bradford & Bingley's
<BB.L> branch network will be sold to Spanish bank Santander
<SAN.MC> and the remainder of the group would be nationalised.
[]
"The news from Fortis and Bradford & Bingley has agitated
worries that there are more problems out there and that the $700
billion package will not turn things around quickly. There are
concerns now earnings across most markets will be weak," said
Bernard McAlinden, market strategist at NCB Stockbrokers.
Royal Bank of Scotland <RBS.L>, UBS <UBSN.VX>, Banco
Santander <SAN.MC>, Barclays <BARC.L>, UniCredit <CRDI.MI> and
BNP Paribas <BNPP.PA> were 5.7-8.2 percent lower.
Investors stayed cautious as U.S. lawmakers prepared to vote
on Monday on a $700 billion government fund to buy bad debt,
worrying that this may not be enough to help stabilise the
economy. []
Worries over demand from a slowing economy pushed miners
lower as copper <MCU3=LX> fell 2.6 percent.
Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton
<BLT.L>, Kazakhmys <KAZ.L>, Xstrata <XTA.L> down 4.5-8.4
percent.
Meanwhile oil extended its decline, with crude <CLc1>
falling nearly 3.3 percent to $103.27 a barrel, pressured by
gains in the U.S dollar.
BG Group <BG.L>, BP <BP.L> and Royal Dutch Shell <RDSb.L>
were between 1.7 and 2.2 percent lower.
(Editing by Greg Mahlich)
