Telecoms lead European shares lower, oil price eases

* FTSEurofirst 300 ends down 0.4 pct

* Ends four-session winning streak

* Weaker outlook from Vodafone weighs on telecom stocks, Wachovia spurs fresh concern about banks' balance sheets

FRANKFURT, July 22 (Reuters) - Weaker oil cushioned a fall in European shares on Tuesday, but stocks ended a four-session winning streak as Vodafone's (VOD.L) outlook disappointed, while poor results at U.S. bank Wachovia WB.N weighed on financials.

European indexes were also hit by weak forecasts from Apple (AAPL.O) and Texas Instruments TXN.N overnight.

Vodafone was the strongest negative weight on the pan-European FTSEurofirst 300 index .FTEU3 with its shares falling around 14 percent.

The world's largest mobile phone company by revenue lowered its outlook for full-year revenue to around the bottom of a previously forecast range as consumers delay buying new phones.

The FTSEurofirst 300 index ended down 0.4 percent at 1,165.04 points, having fallen as much as 2 percent in the session. The index gained some 5 percent in the previous four sessions.

"Gains in the past couple of days were mainly due to a recovery in banking stocks," said Christian Stocker, strategist at Munich-based UniCredit.

While results from Citigroup (C.N), Wells Fargo (WFC.N) and Bank of America (BAC.N) managed to calm fears over banks' balance sheets recently, Wachovia WB.N spooked investors on Tuesday by posting poor quarterly numbers.

Wachovia shares initially dropped more than 10 percent after it said it would slash its dividend and posted an $8.86 billion second-quarter loss, but rebounded when it said it did not plan to sell new shares to raise capital.

"(Wachovia's results) were far, far worse than expected and that seems to have given equities a bit of a knock lower and the yen a bit of a boost," said Adam Cole, global head of FX strategy at RBC Capital Markets.

Stocker said: "It showed that hopes really were just hopes. The burden stays. We haven't reached the bottom yet."

UBS (UBSN.VX) fell 2.1 percent, Banco Santander (SAN.MC) dropped 1 percent and Royal Bank of Scotland (RBS.L) fell 2 percent.

Dexia (DEXI.BR) shares fell 11.5 percent after ratings agency Moody's said it could strip the Belgian-French financial services group's U.S. bond insurance subsidiary FSA of its triple A status.

VODAFONE DRAGS

Vodafone's cautious outlook hit telecoms stocks, with the DJ Stoxx telecom sector .SXKP falling 6.8 percent. Telefonica (TEF.MC) shed 5.6 percent, Deutsche Telekom (DTEGn.DE) lost 4.4 percent and France Telecom (FTE.PA) fell 3.6 percent.

"If a big company like Vodafone raises concern about the economic development then it affects not only the telecom sector but also other sectors, such as industrials," Stocker said.

The DJ Stoxx European technology .SX8P index fell 2.8 percent, hit as Apple (AAPL.O) said its current-quarter earnings would be well below Wall Street targets and as chip maker Texas Instruments TXN.N gave a poor third-quarter profit forecast.

Weaker sector sentiment overshadowed better-than-expected results from telecom equipment maker Ericsson (ERICb.ST), which fell 11.1 percent.

Infineon (IFXGn.DE) fell 7.5 percent, Alcatel-Lucent (ALUA.PA) shed 2.6 percent and ASML (ASML.AS) lost 2.2 percent as a result.

But the market fall was cushioned as the oil price fell some $5 a barrel as a tropical storm moving over the Gulf of Mexico was expected to miss major oil and gas installations.

U.S. crude CLc1 fell $4.90 to $126.14 a barrel by 1610 GMT. Total (TOTF.PA) rose 2.9 percent, BP (BP.L) rose 1.2 percent, and Royal Dutch Shell (RDSa.L) gained 1.4 percent.

European chemical stocks were also firmer after U.S. firm DuPont (DD.N) reported rising profit in the second quarter thanks to its agricultural segment.

BASF BASF.DE gained 1.6 percent and Bayer BAYG.DE rose 1.4 percent. (Reporting by Eva Kuehnen; Editing by David Cowell)