European shares fall as Goldman note hits banks
* FTSEurofirst 300 down 0.7 percent
* Banks weigh, Barclays down 3.4 percent
* Oil stocks rise on crude climb
By Sylvia Westall
FRANKFURT, July 4 (Reuters) - European shares fell on Friday as a bearish brokerage comment dented banking shares, while oil stocks were driven higher by rising crude prices, ahead of a holiday weekend in the United States.
At 1142 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 0.7 percent at 1,169.63 points. United States markets are closed for the Independence Day holiday.
Banks fell after Goldman Sachs cut its rating on Spain's Santander (SAN.MC) to "neutral" from "buy" and lowered price targets for Deutsche Bank (DBKGn.DE), Commerzbank (CBKG.DE) and Deutsche Postbank (DPBGn.DE).
The German banks fell between 2 and 3 percent, Barclays (BARC.L) shed 3.4 percent, while Austria's Raiffeisen International (RIBH.VI) fell 5 percent, a leading loser in Europe.
But UBS (UBSN.VX) bucked the trend, up 0.5 percent after saying a tax credit should help it avoid a big second-quarter loss.
European shares climbed on Thursday after the European Central Bank raised rates by 25 basis points as expected but indicated that no further moves were imminent. But that relief had faded by midday Friday.
Royal Bank of Scotland analysts expressed scepticism about the ECB President Jean-Claude Trichet saying he had "no bias" in favour of further rate moves.
"This is obviously surprising ... in fact it is difficult to believe -- given the amount of inflationary pressure in the region and globally," the note said.
Gerhard Schwarz, head of global equity strategy at UniCredit in Munich said the decision was a short-term positive as the wording of statements was not as hawkish as feared.
"But we cannot get any big relief as long as the overall stagflation fears hang over the market, and the oil price is a major factor in this. There will be a wave of downward pressure on equities after any recovery," he added.
Oil teetered near $145 a barrel ahead of the holiday weekend in the United States and within sight of its all-time high of $145.85 hit on Thursday. Continued...
