* FTSEurofirst 300 down 0.3 percent; 5th day of losses
* Oil majors lose ground in spite of steady crude prices
* Telecoms, pharmas, utilities up in sector rotation
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By Blaise Robinson
PARIS, June 18 (Reuters) - European stocks were down 0.5 percent in early trade on Thursday, falling for the fifth session in a row led by energy stocks, in spite of steady oil prices, but the drop was limited by rising defensive shares.
At 0914 GMT, the FTSEurofirst 300 index of top European shares was down 0.3 percent at 842.94 points.
Oil majors were among the biggest losers, with Total down 0.9 percent, BP off 1 percent and Royal Dutch Shell down 1.3 percent.
Most banking stocks moved lower, with HSBC down 1.1 percent, Barclays down 0.8 percent and Credit Suisse down 0.8 percent.
The Swiss National Bank kept up its drastic measures to fight recession and fend off deflation, and called for rules to split off parts of its dominant banks or limit their size, if needed, to protect the economy.
Miners and steel makers were also on the downside, surrendering early gains. Antofagasta was down 0.7 percent, Lonmin down 1.7 percent and ArcelorMittal down 2.1 percent.
Xstrata bucked the trend, up 0.6 percent, boosted by rating upgrades from Citi and Morgan Stanley.
"The trend is now downward," said Alexandre Le Drogoff, technical analyst at Aurel BGC, in Paris.
"The correction started a few sessions ago will continue for a while," he said, pointing out that major stock indexes including the FTSEurofirst 300 and the DJ Stoxx 600 crossed their 200-day moving averages on the downside on Wednesday, signalling a trend reversal after the strong spring rally.
Fuelling recent doubts over a speedy economic recovery, data on Thursday showed British retail sales fell unexpectedly in May, driven by falls in clothing and footwear.
"Retail sales numbers for May came in lower than analysts had expected, throwing doubt on any near-term economic recovery. Those 'green shoots' aren't looking so green now," said Manoj Ladwa, senior trader at ETX Capital, in London. Around Europe on Thursday, UK's FTSE 100 index was down 0.4 percent, Germany's DAX index was down 0.3 percent, and France's CAC 40 was down 0.3 percent.
Shares in Q-Cells fell 4.2 percent after the solar company said Chief Financial Officer Hartmut Schuening would leave the company after the annual general meeting in June, earlier than planned.
On the upside, stocks seen as defensive gained ground, with telecom group Vodafone up 1.8 percent, pharma firm Sanofi-Aventis up 1 percent and utility group E.ON up 1.6 percent.
HeidelbergCement jumped 16 percent after the debt-laden German cement maker secured a 8.7 billion euro loan restructuring plan from its banks, giving it until the end of 2011 to sell assets and cut costs to overhaul its strained finances.
Chipmaker Infineon rose 2.3 percent after Credit Suisse raised its target price on the stock to 2.7 euros from 1.7 euros.
Club Mediterranee SA surged 6 percent after entrepreneur Bernard Tapie told French newspaper Le Monde in an interview that he had bought just over 1 percent of the company's capital, fuelling speculation about his intentions.
Later in the session, investors will keep an eye on the macro front, with U.S. leading indicators due at 1400 GMT, as well as U.S. weekly jobless claims, due at 1230 GMT.
The FTSEurofirst 300 index of top European shares has gained 31 percent since reaching a record low in early March as better-than-feared macro data and corporate results calmed fears of a prolonged recession, but the rally has lost steam over the past month. (Editing by Simon Jessop)