* FTSEurofirst 300 falls 0.4 percent
* Oils and miners lead losers; banks recover
* Citigroup results in focus after mixed signals on banks
By Sitaraman Shankar
LONDON, July 18 (Reuters) - European shares slipped on
Friday, weighed down by commodity stocks, while banks recovered
ahead of key results from Citigroup <C.N>.
By 0839 GMT, the FTSEurofirst 300 <> fell 0.4 percent
to 1,141.38 points, but was on track to eke out a gain of 1.4
percent for the week thanks to a jump on Thursday.
Lower metal prices and a cooling off in crude took
heavyweight mining and oil stocks lower.
Eurasian <ENRC.L>, Xstrata <XTA.L>, Rio Tinto <RIO.L>, Anglo
American <AAL.L> and BHP Billiton <BLT.L> lost 3-6 percent as
copper futures <MCU3=LX> fell 0.7 percent and gold <XAU=> traded
lower.
Oil inched up to nearly $131 a barrel but was still off
nearly 10 percent this week, and energy shares Total <TOTF.PA>,
Royal Dutch Shell <RDSa.L> and BP <BP.L> were down 0.2-0.5
percent.
But investor focus shifted squarely onto results from
Citigroup later in the session, after JPMorgan's <JPM.N> figures
pleased investors but Merrill Lynch <MER.N> posted a
bigger-than-expected loss on Thursday, sending mixed signals
about a banking sector battered by a credit crisis.
Analysts said that despite Merrill, results from banks had
not been as bad as feared.
"It's difficult to derive a general picture on the bank
results, but one could say they are more reassuring than not,"
said Thierry Lacraz, strategist at Swiss bank Pictet.
"The results from Citigroup will be key because it is
probably the most exposed to risky assets among the large
banks."
Across Europe, Britain's FTSE <> fell 0.3 percent,
Germany's DAX <> gained 0.1 percent and France's CAC
<> fell 0.4 percent. Depressing the tone was a Wall Street
Journal report that embattled Freddie Mac <FRE.N> may sell as
much as $10 billion in new shares to investors. []
BANKS CHOPPY
Banks regained ground, with traders citing short-covering
and hopes for reasonable results from Citigroup.
Commerzbank <CBKG.DE> rose 1.7 percent, Royal Bank of
Scotland <RBS.L> gained 2.3 percent and HSBC <HSBA.L> added 1
percent.
"There has been some serious short-covering over the past
day or two and that is continuing," said a trader. "People have
made lots of money on the downside and want to lock in profits."
Banks led European shares out of a bull market that lasted
four years to mid-2007, taken down by the credit crisis that had
its origins in a meltdown in U.S. subprime, or risky, mortgages.
The FTSEurofirst 300 has lost 24 percent this year and is
trading 30 percent below 6-1/2 year highs hit in July 2007,
placing the index firmly in bear market territory.
"We continue to be underweight on the banking sector, but it
will be a positive for financials, consumer stocks and the broad
market if the oil price goes to $120," said Pictet's Lacraz.
Other major movers included Dutch retailer Ahold <AHLN.AS>,
which fell 6.5 percent after Belgian rival Delhaize <DELB.BR>
spooked investors in the sector by cutting its profit outlook.
Delhaize slumped 16 percent, France's Carrefour <CARR.PA> lost
2.6 percent and Tesco <TSCO.L> sank 2.9 percent.
On the upside, German chipmaker Infineon <IFXGn.DE> jumped 5
percent after Nokia's chief executive told a newspaper that the
handset maker had reached high volumes in single-chip mobile
phone sales.
And Spanish utility Union Fenosa <UNF.MC> topped percentage
gainers in Europe with a 5.5-percent rise after construction
group ACS <ACS.MC> said that several firms were interested in
its Fenosa stake.
(Editing by Louise Ireland)
