European shares under pressure as carmakers drop

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details)

* FTSEurofirst 300 falls 0.5 percent

* Automobile shares among top decliners

* Peugeot (Other OTC: PUGOF - news) down after raid by investigators

By Atul Prakash

LONDON, April 22 (Reuters) - European shares fell for a second day on Friday as automaker Daimler (LSE: 0NXX.L - news) reported disappointing results and said it planned to investigate its emissions certifications. Poor sales also hit luxury group Kering (LSE: 0IIH.L - news) .

The pan-European FTSEurofirst 300 index was down 0.5 percent by 0810 GMT, although it was still headed for a second straight week of gains.

The European auto sector index fell 2.6 percent fell the most, dragged down by a 5.6 percent drop in Daimler (Xetra: 710000 - news) after it reported first-quarter operating profit fell 9 percent.

Daimler also said the U.S (Other OTC: UBGXF - news) . Department of Justice asked it to investigate its emission certification in United States .

Rival PSA Peugeot Citroen fell 3.2 percent after it was raided by anti-fraud investigators on Thursday as part of investigations into auto pollutants.

"The main reason that automotive stocks are down today are renewed emission investigations at Daimler, PSA Renault and Mitsubishi (LSE: 7035.L - news) . So, as could be feared, the problem seems not to be limited to VW alone," said Patrick Casselman, senior analyst at BNP Paribas Fortis.

Volkswagen AG (LSE: 0P6N.L - news) announced an agreement on Thursday to buy back or potentially fix about a half million polluting diesel cars in the United States and set up environmental and consumer compensation funds. Its shares were down 3.2 percent.

Volkswagen is increasing provisions to pay for the scandal to 16 billion to 17 billion euros ($18.1 billion to 19.2 billion) from 6.7 billion euros, a person familiar with the matter told Reuters on Friday. Volkswagen declined to comment on the matter.

French luxury group Kering was down 3.2 percent after its flagship Gucci brand posted a lower-than-expected rise in first-quarter sales on Thursday. The Kering group overall posted lower first-quarter sales than expected.

Finnish financial holding group Sampo (LSE: 0HAG.L - news) fell 5.6 percent, the top decliner in the FTSEurofirst 300 index, after its shares traded without rights to its latest dividend payouts.

However, shares in Zodiac Aerospace (LSE: 0NR6.L - news) surged 6.8 percent on signs Safran (LSE: 0IU8.L - news) was interested in bidding for it, even though Zodiac (Other OTC: ZODFF - news) said late on Thursday that it was not for sale.

Today's European research round-up

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Mike Dolan, Markets Editor EMEA. (Editing by Larry King)