* FTSEurofirst down 0.2 percent early
* UBS, GAM rise but financials weak
* Oils, miners fall
* For up-to-the-minute market news, click on []
By Dominic Lau
LONDON, Nov 17 (Reuters) - European shares retreated from a
13-month closing high on Tuesday and snapped a four-day winning
run, with banks leading the losers after bearish comments from
prominent U.S. analyst Meredith Whitney.
By 0855 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.2 percent at 1,032.06 points, after
rising 1.5 percent on Monday to hit a 13-month closing high.
Within the European banking sector, HSBC <HSBA.L>, Credit
Suisse <CSGN.VX>, Barclays <BARC.L>, Deutsche Bank <DBKGn.DE>
and BNP Paribas <BNPP.PA> were off 0.7-1.3 percent.
Swiss bank UBS <UBSN.VX><UBS.N>, however, advanced 0.7
percent. Its Chief Executive Oswald Gruebel said he was
targeting annual pretax profit of 15 billion Swiss francs
($14.87 billion) as he aimed to put the subprime crisis and a
U.S. tax row behind the bank and win back clients.
Whitney said on Monday that she did not believe the U.S.
equities rally was based on fundamentals, and she was as bearish
as she had been this year in the stock market.
The U.S. banking analyst, who shot to fame by correctly
predicting much of the banking sector's carnage in recent years,
also said there was "no way" the banking sector was well
capitalised and it was time to cut weighting in large-cap banks.
The FTSEurofirst 300 has rallied 60 percent since hitting a
floor in early March, and is up 24 percent so far this year.
However, Stephen Pope, chief global market strategist at
Cantor Fitzgerald in London, was more optimistic on equities.
"Will we continue with the momentum at the higher level?
Absolutely. There is no alternative asset class to go to at the
current time," he said.
Federal Reserve Chairman Ben Bernanke on Monday repeated the
Fed's pledge to keep interest rates exceptionally low for "an
extended period", saying tight credit and a weak job market
would weigh on the economy's recovery.
"Bonds can continue to carry on having a nice run because
they are at levels sort of being supported by accommodation of
lower interest rates," Pope said, but adding that equities would
offer better returns compared with short-dated government bonds.
Miners fell after metal prices eased off from their highs.
Rio Tinto <RIO.L>, Xstrata <XTA.L>, Anglo American <AAL.L>, BHP
Billiton <BLT.L>, Vedanta Resources <VED.L> and Kazakhmys
<KAZ.L> lost 0.5-2 percent.
Oil majors BP <BP.L>, Royal Dutch Shell <RDSa.AS> and Total
<TOTF.PA> were down 0.3-1.1 percent after crude prices <CLc1>
slipped ahead of the release of weekly inventories report.
Across Europe, Britain's FTSE 100 <> was down 0.5
percent, Germany's DAX <> eased 0.3 percent and France's
CAC 40 <> slipped 0.5 percent.
Investors will keep an eye on UK inflation data, due at 0930
GMT, and U.S. producer price inflation and industrial production
later in the day for further clues on the economy. UK consumer
price inflation is expected to rise 0.1 percent in October, and
1.5 percent on the year.
GAM SHINES
Asset manager GAM Holding AS <GAMH.VX> topped the gainers'
list in the FTSEurofirst 300, up 4.5 percent after its asset
under management rebounded between June and October after an
almost year-long slide.
Among individual movers, Accor <ACCP.PA> rose 3.1 percent.
The French hotel group said its board would decide by the end of
the year on whether to split up its two main businesses --
hotels and pre-paid services like hotel vouchers and bank cards.
Cable & Wireless <CW.L> put on 3.2 percent after the British
telecoms group said it plans to raise around 200 million pounds
($336.6 million)via the bond market as part of its refinancing
to ensure the demerger of its two units by April next year.
Shares in Merck KGaA <MRCG.DE> dropped 3.1 percent after
Morgan Stanley downgraded the drug and chemicals company to
"underweight" from "equal weight" and cut its price target.
(Editing by Mike Nesbit)
