* FTSEurofirst 300 down 1.8 percent; hits six-year low
* Insurers, banks beaten down by fears over financial sector
* Auto stocks tumble after downbeat broker notes
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, Feb 24 (Reuters) - European stocks slid in early
trade on Tuesday, echoing sharp losses on Wall Street and in
Asia as lingering fears over the stability of the financial
sector rattled investors.
AXA <AXAF.PA>, Europe's second biggest insurer, dropped 6
percent, dragged down by renewed concerns over the company's
balance sheet and the prospect of a capital increase.
"We believe the solvency remains at low levels leaving
little margin of error in case markets remain under pressure,"
UBS analysts wrote in a note, saying there is an 80 percent
probability of a capital hike.
Other insurers were also hit, with Aegon <AEGN.AS> down 9
percent and Allianz <ALVG.DE> down 2 percent.
The DJ Stoxx insurance index <.SXIP>, down 3.2 percent on
the day, has now lost 32 percent since the start of the year.
Banking shares <.SX7P>, down 29 percent year-to-date, were
also on the downside, with Societe Generale <SOGN.PA> losing 2.7
percent, Credit Suisse <CSGN.VX> falling 6.4 percent and
Deutsche Bank <DBKGn.DE> losing 2.6 percent.
At 0937 GMT, the FTSEurofirst 300 <> index of top
European shares was down 1.8 percent at 716.30 points, a level
not seen in six years. The index, down for the ninth time in
eleven sessions, has lost 14 percent so far this year.
"The banking sector is again at the centre of the negative
newsflow. Full nationalisations are more and more conceivable,"
said Jacques Henry, analyst at Louis Capital Markets in Paris.
"If we don't get a rebound soon, stocks can fall to much
lower levels."
On Monday, Wall Street sank to a 12-year low as news that
the U.S. government was set to increase its stake in Citigroup
<C.N> failed to offset fears that a number of embattled U.S.
banks could be nationalised.
COMMODITIES RETREAT
Commodity-related stocks also retreated, hit by a drop in
metal and oil prices on mounting economic worries. Xstrata
<XTA.L> was down 4.3 percent, Total <TOTF.PA> down 1 percent and
Repsol <REP.MC> down 1.5 percent.
Shares of automakers lost ground. BMW <BMWG.DE>, downgraded
by Morgan Stanley to "underweight" from "overweight", dropped
6.3 percent and Daimler <DAIGn.DE>, downgraded to "market
perform" from "outperform" by Bernstein, was down 5.4 percent.
Around Europe, UK's FTSE 100 index <> shed 0.5 percent,
Germany's DAX index <> fell 1.7 percent, and France's CAC
40 <> lost 1.4 percent.
Adding to the grim picture, the Munich-based Ifo economic
research institute said German corporate sentiment deteriorated
slightly in February, as a worsening in firms' assessment of
current business conditions outweighed a rise in expectations.
The Ifo's business climate index, based on a monthly poll of
around 7,000 firms, fell to 82.6 in February from 83.0 in
January. A Reuters poll of 49 economists had pointed to a flat
reading.
Investors' attention will turn to U.S. consumer confidence
data, expected at 1500 GMT, as the market looks for clues on the
extent of the damage from the recession on consumers' morale.
U.S. home price data, due at 1500 GMT, will alo be in focus.
(Editing by Jon Loades-Carter)
