* FTSEurofirst 300 index down 1.1 pct
* Banks, commods weigh
* Vodafone gains after upgrade
By Joanne Frearson
LONDON, April 1 (Reuters) - European shares were lower in
early trade on Wednesday, weighed by banks and commodities, with
investors cautious ahead of a summit of G20 leaders in London.
By 0831 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was down 1.1 percent at 725.46 points,
following a 3.5 percent rise in the previous session.
"Investors are looking at the G20 for any commitment... like
government expenditure, or more importantly, getting the banking
system working properly so that there is more lending," said
Justin Urquhart Stewart, director at Seven Investment
Management.
"Everyone is on egg shells waiting to see what happens with
G20. Everything ... is now predicated on what comes out of G20,"
he said.
Banking stocks weighed heavily on the index, although stocks
within the sector were mixed. Societe Generale <SOGN.PA> lost
4.3 percent after the French bank said on Tuesday it expects
additional writedowns of risky assets in the first quarter "at
(a) manageable level".
Lloyds Banking Group <LLOY.L>, HSBC <HSBA.L>, Banco
Santander <SAN.MC> were down 1.7-6.5 percent.
"Banks were firmer yesterday for no obvious reason other
than the fact they were retracing some of the pronounced
weakness of the previous day. So banks to be down this morning
is not a surprise," said Bernard McAlinden, strategist at NCB
Stockbrokers.
However, Swiss bank giant UBS <UBSN.VX> gained 0.7 percent
after the group said it had appointed former Credit Suisse
<CSGN.VX> executive Ulrich Koerner as its new chief operating
officer. []
VODAFONE GAINS
Energy stocks fell as crude <CLc1> lost 2.8 percent. BG
Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSb.L> and Total
<TOTF.PA> were down 2.4-3.1 percent. Goldman Sachs cut BP to
"sell" from "neutral".
Miners were in the doldrums as copper <MCU3=LX> slipped 2.2
percent. Anglo American <AAL.L> lost 6.8 percent after the group
said on Tuesday it had sent out a request for proposals to banks
for a loan of about $2 billion, three banking sources close to
the deal said. []
Antofagasta <ANTO.L>, BHP Billiton <BLT.L>, Eurasian Natural
Resources Corporation <ENRC.L>, and Rio Tinto <RIO.L> were
3.5-5.5 percent lower.
Lafarge was down 4.4 percent after the world's biggest
cement maker launched a 1.5 billion euro rights issue at a
subscription price of 16.65 euros, compared with Tuesday's
closing price of 33.89 euros.
On the upside, Vodafone <VOD.L> gained 2.3 percent and
Telecom Italia <TLIT.MI> rose 2 percent after Goldman Sachs
raised both groups to "buy" from "neutral". The broker also
added the UK mobile operator to its "conviction buy list".
Vienna Insurance Group <VIGR.VI> was 4.5 percent higher
after the group said it plans to pay a surprise bonus dividend,
as well as its regular payout, after reporting a 24 percent rise
in 2008 profit, boosted by growing premium income in emerging
Europe. []
In economic news, the pace of decline in euro zone factory
activity eased slightly in March, buoyed by signs of
stabilisation in France and Germany, but firms shed jobs at
record speed, a survey showed.
Later in the session, investors will look closely at U.S.
Manufacturing PMI data, due out at 1400 GMT.
"The main thing today is the U.S. Manufacturing PMI, not
that manufacturing is key to the U.S. economy but it has more
implications for sentiment," added NCB's McAlinden.
Across Europe, the FTSE 100 <> index was down 1.8
percent, Germany's DAX <> was 1.7 percent lower and
France's CAC 40 <> slipped 1.9 percent.
(Reporting by Joanne Frearson; editing by Simon Jessop)
