GLOBAL MARKETS-Shares turn lower, data hits sterling

(Recasts with latest price moves, adds Wall Street outlook)

By Natsuko Waki

LONDON, May 13 (Reuters) - European shares and sterling fell on Tuesday after news of falling profits at Europe's banks and UK data showing a jump in inflation, a weakening housing market and soft retail sales reinforced the gloom about the economy.

Oil fell further away from Monday's record peak, while a firmer dollar pushed gold and platinum lower.

Soaring food and fuel bills pushed up Britain's inflation rate by its biggest amount in nearly six years, denting expectations of growth-boosting interest rate cuts.

At the same time, surveys cemented the view that the UK economy was losing momentum. House prices fell in every region of Britain in April with surveyors reporting the widest margin of decline in at least 30 years. Retail sales values fell for a second consecutive month in April.

"The concern is we are now about to enter a period of high inflation and much slower growth," said Jeremy Batstone-Carr, head of private client research at Charles Stanley.

"But obviously, by not cutting interest rates any more, the risk is that the UK economy goes through a period of even slower growth and possibly flirts with recession."

Sterling fell half a percent to $1.9480 GBP=, approaching Monday's 2-1/2 month low.

The FTSEurofirst 300 index .FTEU3 erased early gains to stand down 0.4 percent while the MSCI main world equity index .MIWD00000PUS fell 0.1 percent, having hit a four-month peak last week. Sterling =GBP fell half a percent on the trade weighted index.

U.S. stock futures were down 0.3 percent SPc1, indicating a weaker open on Wall Street.

Asian shares .MIAPJ0000PUS rose 0.6 percent, while Chinese shares fell 1.8 percent after Monday's earthquake in southwest China where the death toll has reached nearly 12,000.

BANKS HIT

The banking sector was one of the biggest losers in Europe, falling 0.8 percent .SX7P.

Societe Generale (SOGN.PA) reported a 23.4 percent fall in first-quarter net profit, although it was above the market consensus.