Europe shares fall for 5th day on financials, oils

                                
 * FTSEurofirst 300 falls for 5th straight session
                                
 * Financials and auto makers lead the losers
                                
 * Drugmakers offer some support
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]
                                
 
                                
 By Dominic Lau
                                
 LONDON, July 8 (Reuters) - European shares fell for the
fifth straight session on Wednesday to their lowest closing
level in 10 weeks, as investors faced further signs that the
pace of economic recovery will not be quick.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
closed 1.1 percent lower at 817.12 points. The fifth consecutive
drop also marked the index's longest losing streak since
mid-January.
                                
 Volumes on the FTSEurofirst 300 were about 80 percent of its
90-day average daily volume.
                                
 Financials were among the standout losers, with HSBC
<HSBA.L>, Banco Santander <SAN.MC>, UBS <UBSN.VX>, BNP Paribas
<BNPP.PA>, Aviva <AV.L>, KBC Groep <KBC.BR>, Legal & General
<LGEN.L> and AXA <AXAF.PA> off 1.9 percent to 8.7 percent.
                                
 Group of Eight leaders believe the world economy still faces
"significant risks" and may need further help, according to
summit draft documents, while the International Monetary Fund
said the global economy was starting to pull out of recession
but recovery would be sluggish and government policies need to
remain supportive.
The economies of the 16-nation euro zone, and that of the
28-nation European Union, declined at rates of 2.5 and 2.4
percent respectively in the first quarter, it was confirmed by
Eurostat, the EU statistics agency. [ID:nL8729330]
                                
 "People will be very focused on economic data, the shape of
the recovery. A lot of people are betting on the V-shaped type
of recovery, and if that isn't validated by data, then we can
expect the market to come under pressure," said Ronan Carr,
European equity strategist at Morgan Stanley.
                                
 "Equally, if we start to see an improvement in things like
job market data, that will help the market go higher," he said,
adding that investors would also be looking at corporate
earnings for clue on market direction.
                                
 U.S. aluminium major Alcoa <AA.N> is due to kick off the
second-quarter corporate earnings season later in the day.
                                
 The pan-European index has rallied 38 percent from a
lifetime low hit on March 9, but the sharp bounce stalled last
month and the benchmark is down 8.2 percent since June 10.
                                
 European auto makers <.SXAP>, which had got a lift from the
spring rally, have also came under pressure recently, down
nearly 17 percent since June 12.
                                
 On Wednesday, Renault <RENA.PA> sank 7.5 percent, Peugeot
<PEUP.PA> shed 5.1 percent and Daimler <DAIGn.DE> gave up 2.3
percent.
                                
 Oil producers fell as crude prices <CLc1> softened after
U.S. data showed a big rise in fuel stocks. BP <BP.L>, Royal
Dutch Shell <RDSa.AS>, Total <TOTF.PA>, Repsol <REP.MC> and
StatoilHydro <STL.OL> dropped 0.6 percent to 1.7 percent.
                                
 OPEC said world demand for its oil may take years to recover
from the slump in 2009 because of economic weakness and demand
destruction. [ID:nL8624047]
                                
 Shares in basic resources <.SXPP> fell along with metal
prices. Xstrata <XTA.L>, Anglo American <AAL.L>, Vedanta
Resources <VED.L>, Rio Tinto <RIO.L>, Lonmin <LMI.L> and
ArcelorMittal <ISPA.AS> lost between 1.3 and 4.9 percent.
                                
 DEFENSIVES IN DEMAND
                                
 With mounting doubts over the prospect of a quick recovery,
investors' focus is turning to sectors seen as more defensive,
such as healthcare, telecoms and utilities.
                                
 Drugmakers were among the top gainers, wtih GlaxoSmithKline
<GSK.L>, Roche <ROG.VX> and Novartis <NOVN.VX> rising 0.6
percent to 1.5 percent.
                                
 Mobile phone giant Vodafone <VOD.L> advanced 0.7 percent,
while German utility E.ON <EONGn.DE> put on 1.7 percent.
                                
 Across Europe, Britain's FTSE 100 <.FTSE> lost 1.1 percent,
Germany's DAX <.GDAXI> slipped 0.6 percent and France's CAC 40
<.FCHI> shed 1.3 percent.
                                
 "What we've had is a clear re-evaluation on the prospects of
economic recovery," Bob Parker, vice chairman of asset
management at Credit Suisse. "Market expectations were too
optimistic on the pace of recovery, which we think will be
painfully slow, though we are out of recession."
 (Additional reporting by Brian Gorman and Blaise Robinson;
Editing by Hans Peters)