European stocks fall early as banks sag; IKB jumps

PARIS, Aug 21 (Reuters) - European shares fell early on Thursday, surrendering gains made in the previous session as a rise in oil prices revived concerns over inflation and consumer spending while banks fell on renewed credit worries.

IKB (IKBG.DE: Quote, Profile, Research) leapt 21 percent on news that U.S. private equity firm Lone Star [LS.UL] was to take a 90.8 percent stake in the lender, Germany's most prominent casualty of the subprime crisis.

At 0717 GMT, the FTSEurofirst 300 index of top European shares was down 0.9 percent at 1,155.35 points. The index gained 0.5 percent on Wednesday.

Royal Bank of Scotland (RBS.L: Quote, Profile, Research) lost 2.3 percent, BNP Paribas (BNPP.PA: Quote, Profile, Research) shed 1.7 percent and UBS (UBSN.VX: Quote, Profile, Research) fell 1.6 percent.

"The price of oil is going up again, so oil-related stocks might do well but that's a different story for the broad market," said Rik Zwaneveld, trader at AFS Brokers, in Amsterdam.

"Inflation fears are back, on top of worries surrounding the fate of Freddie Mac and Fannie Mae, fears of additional writedowns, etc. etc. People are getting nervous again."

Adding to the negative sentiment in the banking sector, The Financial Times said that Lehman Brothers LEH.N had held talks to sell up to 50 percent of its shares with China's CITIC Securities (600030.SS: Quote, Profile, Research) as well as with state-owned Korea Development Bank, but both investors walked away saying the price was too high. CITIC said it had held no formal talks about buying a stake.

Energy stocks edged higher, with BP (BP.L: Quote, Profile, Research) up 0.9 percent and Total (TOTF.PA: Quote, Profile, Research) up 0.6 percent.

(Reporting by Blaise Robinson)