European shares inch up; Barclays slides on lawsuit
* FTSEurofirst 300 up 0.2 pct, pulls away from 1-month low
* Barclays sags on U.S. fraud lawsuit linked to stock trading
* Danone rallies on mounting M&A speculation
By Blaise Robinson
PARIS, June 26 (Reuters) - European stocks inched up early on Thursday, halting the previous session's sell-off, but Barclays fell 5 percent after the New York Attorney General filed a lawsuit against the bank.
Barclays was the biggest loser among European blue chips, falling after the Attorney General filed a securities fraud lawsuit against the lender for giving an unfair edge to its U.S. high-frequency trading clients even as it claimed to be protecting other customers from the traders.
"The judicial context is becoming a real drag for the European banking sector. There are fears among investors of a contagion effect from the U.S. investigations. After BNP, Barclays, who will be next?," said Alexandre Baradez, chief market analyst at IG France.
The European banking sector index was down 0.4 percent. It has underperformed this year, rising 1 percent while the FTSEurofirst 300 index has gained 4.4 percent.
At 0833 GMT On Thursday, the FTSEurofirst 300 was up 0.2 percent at 1,374.27 points, bouncing back from a one-month low hit on Wednesday following a downward revision of U.S. first-quarter gross domestic product. Continuación...