Europe stocks inch lower; miners hit by commods selloff

PARIS, Dec 18 (Reuters) - European stocks ended slightly lower on Thursday as a selloff in commodity prices hit metal and energy shares while banks tumbled on fresh fears over the health of embattled sector.

But a rally in defensive sectors, such as utilities and telecoms, helped limit the losses.

Carrefour (CARR.PA), the world's second biggest retailer, sank 7 percent after warning late on Wednesday it expects only slight growth in 2008 earnings before interest and tax, compared with previous guidance of a growth of around 7 percent.

The FTSEurofirst 300 .FTEU3 index of top European shares unofficially closed 0.3 percent lower at 826.28 points. The benchmark index is down 45 percent in 2008, dragged by a crisis in the credit market that has triggered a global economic slump, but it is up 10 percent since reaching a floor on Nov 21.

"There is more financial debris to come out of the financial sector when fourth quarter results come through, and the near-term economic data is going to remain pretty poor for quite a while, so we can't rule out new lows for stocks, but we're optimistic that we won't probably see them," said Kevin Gardiner, head of Global Equity Strategy at HSBC Investment Bank.

The banking sector got hammered, with Royal Bank of Scotland (RBS.L) down 8.9 percent and Credit Agricole (CAGR.PA) down 3.4 percent.

BNP Paribas (BNPP.PA) lost 2.5 percent, adding to the previous session's slump. The bank said it was suspending a key part of the deal to buy some businesses of Fortis (FOR.BR) due to a legal challenge. The deal would had have the effect of boosting the balance sheet of BNP Paribas.

Miners and oil producers figured among the biggest losers, as crude oil futures plummeted 4.5 percent to around $38 a barrel while metal prices plunged on fresh worries over demand.

BP (BP.L) shed 2.6 percent and Rio Tinto (RIO.L) sank 2.5 percent.