European shares lower at midday; oils fall

* FTSEurofirst 300 index falls 0.5 pct

* Banks gain but UBS slips on tax dispute worries

* Ryanair gains after raises profit forecast

By Brian Gorman

LONDON, Feb 1 (BestGrowthStock) – European equities were lower
around midday on Monday, with energy shares falling on worries
about Chinese demand and after President Barack Obama projected
the U.S. budget deficit would soar to a fresh record in 2010.

At 1207 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index was down 0.5 percent at 1,007.01 points.

In January the index suffered its worst monthly loss since
February 2009, knocked by mounting worries over Greece’s debt
and the prospect of more regulation on the banking system.
However, it remains up more than 56 percent from its lifetime
low of March 9.
“(The direction of the market) will depend on key factors
such as whether or not Greece’s restructuring plan is credible,
and other political factors, such as regulatory intervention in
the banking sector,” said Andy Lynch, fund manager at Schroders.

Oil stocks slipped, with crude prices (CLc1: ) having fallen 8
percent in January, the biggest percentage drop since December
2008.

BP (BP.L: ) fell 0.8 percent, ahead of results on Tuesday.
Total (TOTF.PA: ), ENI (ENI.MI: ), BG (BG.L: ) and Royal Dutch Shell
(RDSa.L: ) fell between 0.6 and 1.3 percent.
On the macroeconomic front, China’s manufacturing powered
ahead in January, providing more evidence of its robust economic
health. [ID:nSGE61000U]

But Beijing’s moves last month to rein in rapid growth and
curb inflationary pressures have sparked fears that such
measures could impede a still-weak global economic recovery and
curb Chinese demand for energy and commodities.

Across Europe, the FTSE 100 (.FTSE: ) index was flat;
Germany’s DAX (.GDAXI: ) was down 0.1 percent and France’s CAC 40
(.FCHI: ) fell 0.3 percent.

BANKS ADVANCE

Banks extended gains from Friday. Banco Santander (SAN.MC: ),
Barclays (BARC.L: ), Credit Suisse (CSGN.VX: ), Deutsche Bank
(DBKGn.DE: ), HSBC (HSBA.L: ) and Standard Chartered (STAN.L: ) rose
between 0.9 and 2.2 percent.

But UBS (UBSN.VX: ) fell 1 percent after the Swiss justice
minister said the economy would suffer if the Swiss bank
collapsed as a result of its unresolved U.S. tax dispute.
[ID:nLDE6100DY]

Among individual stocks, Tenaris (TENR.MI: ) lost 4.9 percent.
The company is expected to post a 30 percent fall in 2009
revenues and a 40 percent fall in EBITDA, Il Sole 24 Ore said in
its ‘Letter to the Investor’ column on Sunday.

Vivendi (VIV.PA: ) fell 3.4 percent after the French media and
telecommunications giant was found guilty of misleading
investors by a U.S. jury on Friday. [ID:nN29195757]

On the upside, Irish airline Ryanair (RYA.I: ) rose 5.7
percent as the company increased its profit forecast for the
year after a narrower-than-expected third-quarter net loss.
[ID:nDUB003166]

British Airways (BAY.L: ), which is due to issue a trading
update on Friday, rose 3.3 percent on optimism that its proposed
tie-up with American Airlines (AMR.N: ) and Iberia (IBLA.MC: ) was
moving closer to gaining approval from the European Commission.

Investors will look at U.S. December personal income and
personal consumption numbers, scheduled for release at 1330 GMT.

Also on Monday, U.S. President Barack Obama’s budget for the
fiscal year to Sept. 30, 2011, which must be approved by the
U.S. Congress, forecast a deficit of $1.56 trillion in 2010,
equal to 10.6 percent of gross domestic product.
He is seeking to strike a balance between taming
skyrocketing deficits and giving the economy a boost to ease the
pain of double-digit unemployment. [ID:nN31157907]

Schroders’ Lynch said: “It’s well known the deficit is
cataclysmically awful, but if it was cut too rapidly, we could
run the risk of going back into recession.”

Stock Market Trading

(editing by John Stonestreet)

European shares lower at midday; oils fall