STOCKS NEWS EUROPE-L&G falls; Citigroup downgrades

Shares in Legal & General Group (LGEN.L) shed 4.6 percent, leading a weak insurance sector lower as financial stocks take a battering and as Citigroup cuts its rating for the stock to "sell" from "hold" in a sector review.

"Business models reliant on investment leverage, with inadequate scale/ diversification and the inability to generate organic capital have been marginalised by the current crisis," Citigroup says.

"On the other hand, industry trends favour companies with growth potential in under-penetrated markets, ability to restructure back books and potential for consolidation," the broker adds.

Citigroup says its key themes of growth and restructuring drive its recommendations and it prefers relative winners from the crisis and sees limited further potential for recovery plays.

The broker upgrades peer Prudential (PRU.L) to "buy" from "hold, and, initiates coverage of Resolution (RSL.L) with a "buy" rating.

Shares in Prudential and Resolution track the weak market trend, however losing 1.7 percent and 2.8 percent, respectively.

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net