Europe shares stretch winning run to 5th day

LONDON (Reuters) - European stocks eked out a gain on Monday to extend a winning streak to five days, as advances in defensive utility, drug and food shares offset big losses in Volkswagen (VOWG.DE) and falls in UK banks.

The pan-European FTSEurofirst 300 .FTEU3 index of top European shares ended unofficially 0.2 percent higher at 930.42 points.

The index lost 12.7 percent last month in its worst monthly performance in six years and has declined nearly 40 percent this year on a credit market crisis that led to meltdown in the banking sector and a slowing of the economy.

On Monday gains in defensive stocks ensured a positive finish, with utility E.ON (EONGn.DE) adding most points to the benchmark with a 7.1-percent rise, while foods group Nestle (NESN.VX) rose 2 percent. E.ON also benefited from a reweighting of Germany's DAX .GDAXI index.

Other defensive gainers included GlaxoSmithKline (GSK.L), up 4.4 percent, and Novartis (NOVN.VX), which rose 2.7 percent.

Volkswagen, a German automaker, fell 23 percent after exchange operator Deutsche Boerse cut its weighting in the DAX.

And mobile telecoms group Vodafone (VOD.L), a stock with a big weight on the pan-European index, fell 2.2 percent after a source familiar with the situation said the company was calling analysts to collate forecasts. Traders had cited a rumour it was guiding analysts to expect a lower result.

Royal Bank of Scotland (RBS.L) fell 3.4 percent and Barclays (BARC.L) lost 4.1 percent, the latter falling on continued worries over the cost of its equity injection from Middle East investors.

Underlining concerns that an economic downturn may be deep, U.S. manufacturing slumped to a 26-year low in September. The Institute of Supply Management said that its index of national factory activity fell to 38.9 in October from 43.5 in September.