* FTSEurofirst 300 index flat
* Banks leading gainers; Barclays up 6.3 pct
* Lower oil price weighs on energy stocks
By Peter Starck
FRANKFURT, May 14 (Reuters) - European shares were flat in
early trade on Thursday, with gains for banks such as Barclays
<BARC.L> and UBS <UBSN.VX>, outweighing losses for energy stocks
after oil prices fell more than 2 percent.
At 0910 GMT, the FTSEurofirst 300 <> index of top
European shares was down 0.05 percent at 831.28 points in a
choppy morning session.
The benchmark, which fell 2.5 percent on Wednesday to extend
its losing streak to three sessions, gained as much as 36
percent between March 9 and May 7.
Many investors, cautious after the hefty stock market losses
suffered in 2008, remained on the sidelines during that rally,
which was fuelled primarily by hopes that the recession may be
coming to an end and by first-quarter bank earnings that were
less bad than expected.
Some have worked up the courage to step back into equities
and see the latest three-day losing streak as an appropriate
entry point, strategists and fund managers said.
"Many are very underinvested in equities," said Bert
Flossbach, fund manager at German wealth management boutique
Flossbach & von Storch.
"I don't think we will see new lows again," he said.
Citigroup strategist Robert Buckland also said the March low
"likely signalled the trough in this equity bear market".
"There is still room for risk assets to rally further ...
(and) risk exposure should be increased on any pullback,
particularly in equities," he said in a global equity strategy
note.
Banks, up 1.7 percent on the DJ Stoxx sector index <.SX7P>,
added most points to the FTSEurofirst 300, with Barclays
<BARC.L> up 6.3 percent, UBS <UBSV.VX> gaining 4.7 percent,
Societe Generale <SOGN.PA> up 2.3 percent and HSBC <HSBA.L> also
up 2.3 percent.
Oil & gas <.SXEP> was the weakest sector after the
International Energy Agency said world oil demand this year will
post the sharpest annual decline since 1981, sending crude
prices <CLc1> more than 2 percent lower.
Shares in ENI <ENI.MI> fell 2.3 percent, Royal Dutsch Shell
<RDSa.L> lost 1.4 percent and Total <TOTF.PA> traded 1.6 percent
lower.
SBM Offshore <SBMO.AS> dropped 12.3 percent after the Dutch
maritime engineering group cut its full year guidance, saying it
did not secure any major new orders for its floating production,
storage and offloading platforms for oil firms in the first
quarter.
Shares in chemicals maker BASF <BASF.DE> fell 1.9 percent
after German chemicals industry trade group VCI said Germany,
Europe's largest market, was in for a 12 percent sales drop in
2009.
Later in the session, investors will focus on U.S. weekly
jobless claims and April producer prices, both sets of data are
due at 1230 GMT.
(Editing by Sharon Lindores)
