* FTSEurofirst 300 falls 0.5 pct, down for 5th straight day
* Energy shares drop as oil prices lose nearly $1 a barrel
* Miners, steels mixed ahead of Alcoa's results
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, July 8 (Reuters) - European shares fell in early
trade on Wednesday, mirroring big losses on Wall Street and
losing ground for the fifth straight session, as investors
braced for the start of the corporate earnings season.
Oil firms were among the biggest losers, falling along with
crude prices <CLc1> on growing doubts over the health of the
global economy. Royal Dutch Shell <RDSa.AS> was down 0.8 percent
and Total <TOTF.PA> down 1 percent.
Banks were also losing ground, with Banco Santander <SAN.MC>
down 1.7 percent, Barclays <BARC.L> down 1.9 percent and
UniCredit <CRDI.MI> down 2 percent.
At 0825 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.5 percent at 821.99 points, after
falling to a 10-week low of 820.01 earlier. The fifth
consecutive drop also marked the index's longest losing streak
since mid-January.
"The downward trend is set to continue for a while," said
Alexandre Le Drogoff, analyst at Aurel BGC.
"We might get a small rebound at some point, but there will
still be room on the downside, and you can expect a typical
sector rotation in favour of the defensives as risk appetite
drops."
After reaching a record low in early March, the pan-European
index surged 38 percent during the spring. But the sharp rally
stalled last month and stocks have given up some of their gains
on rekindled concerns about the economic recovery and corporate
results, with the FTSEurofirst 300 down 7.7 percent since June
10.
Aluminium major Alcoa <AA.N> is due to kick off the second
quarter corporate earnings season later on Wednesday.
Shares of mining and steel companies -- recently hit by
worries that earnings might not justify valuations after the
sector's sharp jump during the spring rally -- were mixed on
Wednesday, with Rio Tinto <RIO.L> up 1.6 percent, Xstrata
<XTA.L> down 0.9 percent and ArcelorMittal <ISPA.AS> down 1.3
percent.
The sector <.SXPP>, which plummeted 65 percent in 2008, is
up 29 percent this year, making it the best performing in
Europe.
TURNING DEFENSIVE
But with mounting doubts over the prospect of a quick
economic recovery, investors' focus is turning to sectors seen
as more defensive, such as health care, telecoms and utilities.
"Over the last four weeks we have seen the greatest level of
buying in telecoms, which has also been the best performing
sector over this period," UBS strategist Nick Nelson wrote in a
note.
On Wednesday, telecom group Vodafone <VOD.L> was up 0.7
percent, drugmaker GlaxoSmithKline <GSK.L> put on 0.4 percent
and Italy's utility Enel <ENEI.MI> was up 1.1 percent.
Also on the upside, German chipmaker Infineon <IFXGn.DE>
surged 7.7 percent after the company said late on Tuesday it
would sell its wireline communication unit (WLC) to a U.S.
investor for 250 million euros.
"Post this transaction, (the company's) net debt position
will come down to only 75 million euros, according to our
(estimates), with gross cash going up to 1.1 billion euros,"
Credit Suisse analysts said in a note.
Around Europe, UK's FTSE 100 index <> was down 0.3
percent, Germany's DAX index <> slipped 0.3 percent, and
France's CAC 40 <> eased 0.7 percent.
So far this year, the FTSE 100 is down 5.9 percent, the DAX
is down 4.7 percent and the CAC is down 6 percent.
(Editing by Elaine Hardcastle)
