* FTSEurofirst 300 down 1.8 pct
* Pharmaceutical, oil stocks fall
* Insurers gain on Obama effect
LONDON, Nov 5 (Reuters) - European share prices were down at midday on Wednesday as investors turned their attention back to the economy after Barack Obama’s victory in the U.S. presidential election, with pharmaceutical and oil stocks the main drags on the index.
By 1131 GMT, the FTSEurofirst 300 .FTEU3 index of leading European shares was down 1.8 percent at 956.59, breaking six straight days of gains.
The index has lost nearly 37 percent so far this year. The new Obama administration, which takes office in January, will face the world’s worst financial crisis since the Great Depression, and a potentially steep downturn in the global economy.
“The market will always say that a (U.S.) Democratic (election) victory will always be bad news for pharmaceuticals and there has been selling there,” said Jim Wood-Smith, head of research at William de Broe.
“Ever since former president Bill Clinton’s key policy was to reduce the cost of drugs to the consumer, the market has said a Democratic victory is not good for the sector. However, it is all half-hearted stuff and I would not read too much what Obama will or will not do, it is another story getting legislation passed,” added Wood-Smith.
Simon Mather, an analyst at WestLB, said: “The victory of Barack Obama opens the door for accelerating pricing pressure.”
Energy stocks dragged the index lower as crude CLc1 fell 3.3 percent and analysts said an Obama win could mean a windfall tax on oil companies as he favours green or alternative energy.
Banks also weighed. BNP Paribas BNPP.PA lost 4.3 percent after the group said its third-quarter net profit more than halved due to higher provisions related to the financial crisis.
Allied Irish Banks ALBK.I fell 2.8 percent after it cut its full-year earnings forecast, increased its bad debt charge expectations and cancelled its 2008 cash dividend to raise capital ratios.
Across Europe, the FTSE 100 index was down 1.9 percent, Germany’s DAX was 1.3 percent lower and France’s CAC 40 was down 2.3 percent.
INSURERS UP AFTER OBAMA WIN
Insurers were up as analysts suggested that Barack Obama is likely to place a higher tax on income which will lead the affluent to buy more tax-deductible insurance products.
“If Obama were to raise taxes for wealthy people they would have an incentive to save more for their pension, because that’s tax deductible,” said Michael Van Wegen, insurance analyst at Societe Generale.
The automobile sector was also one of the few to gain with Volkswagen VOWG.DE 6.6 percent higher after analysts said the group was set to stay in Germany's bluechip DAX index .GDAXI at least for the short term. [ID:nL4485922]
Looking at individual stocks Stora Enso STERV.HE gained 1.6 percent after the group said it has signed an agreement to outsource most its financal transaction processiong to CapGemini CAPP.PA. (Additional reporting by Ben Hirschler and Brian Gorman; Editing by Greg Mahlich)
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