* FTSEurofirst sheds nearly 1 percent to 1,181.88 points
* Banks, surging oil drag on wider market
* TeliaSonera tumbles after France Telecom ditches bid
By Rebekah Curtis
LONDON, June 30 (Reuters) - European shares fell early on
Monday, putting them on track for the seventh losing session out
of nine, as banks and red-hot oil prices marked the end of a
dismal first half roiled by a credit crisis and inflation fears.
The FTSEurofirst 300 <> index of top European shares
fell 0.9 percent to 1,181.88 by 0855 GMT.
Banks took more than three points from the index, with heavy
laggards UBS <UBSN.VX>, BNP Paribas <BNPP.PA> and Royal Bank of
Scotland <RBS.L> all falling between 3 and 4 percent. Fortis
<FOR.BR> fell 4 percent after Citigroup cut its price target on
the stock.
Telecoms group TeliaSonera <TLSN.ST> shed 14 percent after
France Telecom <FTE.PA>, up 6.2 percent, ditched its proposed
bid for its Nordic rival.
Euro zone inflation jumped to a new record of 4.0 percent
year-on-year in June, cementing expectations the European
Central Bank will raise rates this week despite slowing economic
growth.
The European stock market is on track for a 20 percent loss
in the first half of 2008, in sharp contrast to an 8.2 percent
gain in the first half of last year, as investors fret over high
energy prices, a slowing economy and the impact of the credit
crisis on banks.
"It's been completely and totally diabolical," David Buik of
Cantor Index in London said of the first half. "We're clean out
of confidence and sentiment is poor ... I foresee significant
pain going through the summer."
"We got some serious messages in August of last year about
subprime lending and no one really wanted to believe it," he
added.
"It's been very depressing. It's taken the investment world
a long time to wake up to reality."
Around Europe, Britain's FTSE 100 <> rose 0.05 percent,
Germany's DAX <> fell 1.5 percent and France's CAC-40
<> dropped 0.9 percent.
SCORCHING OIL
Crude prices near $143 a barrel, and within touching
distance of record highs, fanned inflation concerns but
supporting oil shares.
BP <BP.L>, Royal Dutch Shell <RDSa.L> and Total <TOTF.PA>
all shed between 0.6 and 1 percent.
The oil price took its toll on airline shares, with British
Airways <BAY.L> and Lufthansa <LHAG.DE> both down nearly 4
percent, while Air France-KLM <AIRF.PA> shed 2.5 percent.
Miners also rose, with Rio Tinto <RIO.L> rising 2.5 percent
after the Financial Times cited people familiar with the
situation as saying steel tycoon Lakshmi Mittal is looking at
entering the takeover battle for the mining group.
Rising copper and gold prices also supported mining stocks.
BHP Billiton <BLT.L>, which bid for Rio earlier this year,
added 2 percent, while Xstrata <XTA.L> gained 1.8 percent and
Anglo American <AAL.L> rose 1.7 percent.
On the downside, Britain's ITV <ITV.L> shed 6.3 percent
after Deutsche Bank cut its price target on the stock to 48
pence from 55 pence.
(Editing by Quentin Bryar)
