STOCKS NEWS EUROPE-UBS down 5 pct on reports of heavy loss

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08:51GMT 12Jan2009-UBS down 5 pct on reports of heavy loss

---------------------------------------------------------- Shares in Swiss banking giant UBS UBS.VX(UBS.N) fall 5.2 pct to 16 Swiss francs after weekend press reports the Swiss banking giant could face heavy losses for the fourth quarter and a large fine following a U.S. tax investigation.

"The shares are down after reports at the weekend that they could post a total full-year loss of 20 billion Swiss franc ($17.89 billion)," says ZKB banking analyst Andreas Venditti.

"One paper mentioned a loss of 8 bln in the quarter and there could also be a large fine," he adds in reference to a report UBS could face a fine of some 2 billion Swiss francs in relation to a U.S. tax investigation.

UBS shares are underperforming the Dow Jones index of European banks .SX7P, which is down 0.62 percent.

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Reuters Messaging rm://jason.rhodes.reuters.com@reuters.net ($1=1.118 Swiss Franc)

08:48GMT 12Jan2009-FTSE Small Caps open up 0.4 percent

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The FTSE Small Cap Index .FTSC opens 0.4 percent higher, outperforming the wider market where pessimism over the forthcoming earnings season in the U.S. restrains any significant move into positive territory.

London's blue chip stocks .FTSE lose 0.4 percent, while mid cap .FTMC shares fall 0.1 percent.

Taylor Wimpey (TW.L), the embattled small cap housebuilder, jumps 20 percent, extending Friday's gains, following reports in the Financial Times that the company has formally agreed with its senior creditors key terms for a restructuring of its finances.

Galliford Try (GFRD.L), the British construction group, falls 3.4 percent as the company says it will cut its interim dividend by half or more in light of the economic conditions, adding the housing market remains "extremely difficult".

Reuters Messaging rm://david.brett.reuters.com@reuters.net