* FTSEurofirst 300 index down 1 percent
* Banks fall; drugmakers rise
* For up-to-the-minute market news, click on []
By Joanne Frearson
LONDON, Sept 1 (Reuters) - European shares fell in morning
trade on Tuesday in a choppy session, with the banking sector
dragging the main index lower overshadowing gains in defensive
drugmakers.
By 0838 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was down 1 percent at 962.03 points having
earlier been up as much as 978.68 points.
The index rose 4.7 percent in August and is up nearly 50
percent from its lifetime low on March 9, as investors have
become more confident on the prospects of economic recovery.
"Defensives had been leading the way this morning, so it
looked like the market was not feeling altogether happy with
things," said Mike Lenhoff, strategist at Brewin Dolphin.
"Maybe the market is just a bit uncomfortable at having
progressed non stop against a background of incredibly good
newsflow. The market has been looking overbought so maybe
technically it is just up with events and apprehensive about
storming ahead with no consolidation or pause for breath," he
said.
Banks took the most points off the index. HSBC <HSBA.L>,
Lloyds Banking Group <LLOY.L>, BNP Paribas <BNPP.PA>, Barclays
<BARC.L> and Credit Suisse <CSGN.VX> were down 1.9 to 3.2
percent.
The exception was Commerzbank <CBKG.DE> which was up 4.1
percent after CEO Martin Blessing told one newspaper that the
company may return to profit next year.
Miners were lower as copper <MCU3=LX> slipped 3.2 percent
following a sell-off in Shanghai. Anglo American <AAL.L>,
Antofagasta <ANTO.L>, BHP Billiton <BLT.L>, Eurasian Natural
Resources Corporation <ENRC.L> and Xstrata <XTA.L> were down 1.8
to 5.6 percent.
Energy fell as crude <CLc1> stayed at $70 a barrel following
a 4 percent drop overnight. Royal Dutch Shell <RDSa.L>, BP
<BP.L> and Total <TOTF.PA> were down 0.5 to 1.7 percent.
Across Europe, the FTSE 100 <> index was down 1.4
percent, Germany's DAX <> was 1.6 percent lower and
France's CAC 40 <> was down 1 percent.
ASTRAZENECA GAINS
Drugmakers were the biggest risers on the index. AstraZeneca
<AZN.L> gained 1.6 percent, boosted by impressive trial results
with its experimental blood thinner Brilinta, a rival to
Sanofi-Aventis <SASY.PA> and Bristol-Myers Squibb's <BMY.N> $9
billion-a-year blockbuster Plavix.
Sanofi-Aventis was 1.3 percent higher, while GlaxoSmithKline
<GSK.L>, Novartis <NOVN.VX> and Roche <ROG.VX> were up 0.5 to
1.2 percent.
Chemical company BASF <BASF.DE> was 0.5 percent higher
following reports in a German daily that Chinese state-owned
companies might be interested in buying a stake in the company.
Europe's largest entertainment group Vivendi <VIV.PA> was up
1.5 percent after second-quarter earnings beat forecasts.
Looking at macro economic news, investors will eye the U.S.
National Association of Realtors releases Pending Home Sales for
July at 1400 GMT. Economists in a Reuters survey expect a 2.0
percent rise compared with a 3.6 percent increase in the
previous month.
"U.S. pending home sales today is all about house prices as
activity or contribution to the economy has become very small.
Anything that shows new home sales rising and inventories
falling is good as it strengthens the case home prices are
stabilising," said Bernard McAlinden, market strategist at NCB
Stockbrokers.
Earlier, the Markit Eurozone Manufacturing Purchasing
Managers Index for August jumped to 48.2 from 46.3 in July,
above economists' forecasts and revised up from the 47.9 flash
reading, but still well below the 50.0 mark that divides growth
from contraction. []
(Editing by Mike Nesbit)
