* FTSEurofirst 300 falls to lowest close since Jan. 23
* Banks hit by worries over emerging Europe
* Energy stocks hit by demand concerns on crude
By Brian Gorman
LONDON, Feb 17 (Reuters) - European shares fell to their
lowest close in three weeks on Tuesday, with banks down on
worries of further losses and the impact of a recession in
emerging Europe and energy stocks tracking lower oil prices.
The FTSEurofirst 300 <> index of top European shares
fell 2.5 percent to 765.43 points, its lowest close since Jan.
23. It has lost 8 percent this year, following a 45 percent
decline in 2008.
Ratings agency Moody's said the recession in emerging
European economies would be more severe than elsewhere due to
large imbalances and would put the financial strength ratings of
local banks and western parents under pressure.
Rival ratings agency Standard & Poor's (S&P) echoed this
view, saying difficulties faced by Western banks in supplying
their subsidiaries in emerging Europe with funding could prompt
an overall ratings review for the region's banks. []
Banks took most points off the index. Societe Generale
<SOGN.PA> fell 9.6 percent to its lowest close in more than 10
years, ahead of results on Wednesday. HSBC <HSBA.L> fell 6.8
percent after Morgan Stanley said it was staying underweight on
the stock and becoming more bearish on the outlook for profit in
2009 and 2010.
"There's a lack of good news out there," said Howard
Wheeldon, strategist at BGC Partners, in London. "There are a
lot of things going on, but no quantifiable certainty that
anything such as the Obama package will make a real difference
soon enough."
"There's nothing for a bull to hang his hat on."
Raiffeisen <RIBH.VI> and KBC <KBC.BR> fell 13.5 and 12.9
percent respectively, while Standard Chartered <STAN.L> lost 8.9
percent, Santander <SAN.MC> fell 6.7 percent and UBS <UBSN.VX>
lost 5.5 percent.
"The news on emerging Europe is important, especially for
countries like Austria and Germany and for certain banks. The
focus today is on the banks but it is also valid for the
manufacturing sector," said Gerhard Schwarz, head of global
equity strategy at UniCredit in Munich.
INSURERS SLIDE
Insurers were also among the biggest casualties on worries
about more writedowns, as more companies default on loans.
Shares in Aegon <AEGN.AS> fell 11.4 percent, after the Dutch
company reported a bigger than expected preliminary loss of 1.2
billion euros in the fourth quarter.
ING <ING.AS>, which reports fourth-quarter results on
Wednesday, fell 8.5 percent. Allianz <ALVG.DE> closed 6.7
percent lower.
Across Europe, the FTSE 100 index <>, Germany's DAX
<> and France's CAC 40 <> fell between 2.4 and 3.4
percent.
All 38 sectors in the FTSEurofirst 300 fell.
Worries over weaker demand as a result of worldwide economic
slowdown hit the price of crude oil <CLc1>, which fell more than
7 percent to below $35.
Royal Dutch Shell <RDSa.AS>, Repsol <REP.MC>, and Total
<TOTF.PA> shed 1.6-3.5 percent.
Shares in Daimler <DAIGn.DE>, which makes Mercedes-Benz
cars, closed 3.8 percent lower after it declined to give a
profit forecast for this year when delivering a fourth-quarter
loss, weighed by significant losses and charges at Chrysler.
Fiat <FIA.MI> shares initially fell sharply after a
Bloomberg report the company was considering a rights issue but
recovered to 0.5 percent down after the company dimissed the
story as groundless.
Wall Street, trading for the first time since Friday due to
the President's Day holiday, was lower around the time European
bourses were closing.
The Dow Jones <>, S&P 500 <.SPX> and Nasdaq Composite
<> were down between 3.2 and 3.8 percent, on concern that
the recession is worsening and that efforts to stabilize the
beleaguered financial system may not be enough.
President Barack Obama was due to sign the Stimulus Bill on
Tuesday, a $787 billion package, as the U.S. tries to fight a
deep recession.
(Additional reporting by Sitaraman Shankar; editing by David
Cowell)
