Europe stocks fall on flu fears; drugmakers rise

LONDON, April 27 (Reuters) - European stocks fell early on Monday as fears of a swine flu pandemic hit airline, bank and commodity shares on worries that travel and trade would be hit.

By 0722 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was down 1.8 percent at 795.88 points following a 2.3 percent rise on Friday.

"A nasty chill will run through the market with swine flu as people think back to the SARS virus," said Justin Urquhart Stewart, investment director at Seven Investment Management.

"The threat of the pandemic will add further weakness to global trade -- we saw with SARS tangible percentage points knocked off the index and that was in a bouyant time. Put that in a weaker time and it is likely to be more unpleasant," he said.

Airline stocks were hit by fears that the outbreak would hit travel, with British Airways BAY.L, Air France-KLM (AIRF.PA) and Deutsche Lufthansa (LHAG.DE) falling 8.9-13.6 percent and leading losers in their respective countries.

Drugmakers were higher on vaccine hopes against the virus. Drugmakers said on Sunday they could supply millions of doses of medicine and were read to work on a vaccine against a new type of swine flu. [ID:nLQ588649]

GlaxoSmithKline (GSK.L), Roche (ROG.VX) and Sanofi-Aventis (SASY.PA) were up 2.5-4.6 percent.

Among the banks, HSBC (HSBA.L), Banco Santander (SAN.MC) and Credit Suisse (CSGN.VX) were down 2.9-3.4 percent.

BNP Paribas (BNPP.PA) slipped 3.5 percent after Chinese insurer Ping An (601318.SS), the largest shareholder of Fortis FOR.BR, said it planned to vote against selling the stricken group's assets to the group, casting fresh doubt on the deal. [ID:nLQ483417]

Energy and mining stocks were lower as crude CLc1 and metal prices retreated.

Reporting by Joanne Frearson)