Europe stocks sag as Deutsche Bank, HSBC sink
* FTSEurofirst 300 down 1.2 pct, 6th straight day of losses
* Deutsche Bank down 9 pct on fresh losses
* HSBC tumbles 8.5 pct on dividend, capital hike fears
PARIS, Jan 14 (Reuters) - European shares dropped on Wednesday, falling for the sixth consecutive session and turning negative on the year on renewed fears surrounding banks' balance sheets.
Deutsche Bank (DBKGn.DE) tumbled 9 percent after saying it has racked up a loss of about 4.8 billion euros ($6.4 billion) in the final three months of 2008 alone, blaming troubled markets.
HSBC (HSBA.L) tumbled 8.5 percent after Morgan Stanley analysts said the bank is likely to halve its dividend and may need to raise up to $30 billion in a rights issue.
"Our detailed study of HSBC's capital and asset quality position reinforces our belief that it will have to halve the dividend and raise major capital in 2009," Morgan Stanley analysts Anil Agarwal and Michael Helsby said in a note.
Other leading European banks also took a beating, with Societe Generale (SOGN.PA) down 7.2 percent and Credit Suisse (CSGN.VX) down 6.5 percent.
"In the first week of the year, people forgot about banks' woes for a moment. But now they are back in the spotlight," said Natixis analyst Pascal Decque.
At 1119 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 1.2 percent at 829.88 points.
Britain's Barclays (BARC.L) said it is cutting more UK-based jobs in its retail and commercial banking business, which a person familiar with the matter said is likely to mean a further 2,100 jobs will go. Its shares were down 13.2 percent.
The DJ Stoxx banking index .SX7P, which plummeted 65 percent in 2008, has lost 3 percent so far in 2009, underperforming the FTSEurofirst 300, which is down 0.3 percent.
Investors were also digesting news that Citigroup (C.N) moved towards dismantling itself as it agreed to merge its Smith Barney brokerage with Morgan Stanley's (MS.N) wealth management unit and is expected to make further asset sales to raise capital.
Global bellwether General Electric (GE.N) fell more than 5 percent on Tuesday after an analyst said the conglomerate's profit could rely heavily on tax benefits when it reports results next Friday. Continued...
