* FTSEurofirst 300 down 0.2 percent
* StanChart (HKSE: 2888-OL.HK - news) and UBS (NYSEArca: FBGX - news) shares slump after results
* Shell (LSE: RDSB.L - news) and BG shares rise
* VW falls as emissions scandal widens (Recasts, adds quote)
By Sudip Kar-Gupta
LONDON, Nov 3 (Reuters) - European shares edged lower on Tuesday, with banks falling after weak earnings from Standard Chartered and UBS dampened sentiment in the sector.
Standard Chartered (BSE: 580001.BO - news) slid 9 percent after it announced plans to raise $5.1 billion in new capital through a rights issue and cut 15,000 jobs by 2018 as new Chief Executive Bill Winters tries to restore profitability at the bank, which has been hit by a slowdown in emerging markets.
Analysts at Investec (LSE: INVP.L - news) described the loss as "awful", given that consensus estimates were for a 903 million pound profit.
"As we feared, the worst aspect... is a broad-based collapse in revenues," analysts at Investec said in a note. "Standard Chartered has already been the worst performing FTSE 100 bank in 2015 year-to-date, but we expect it to see further significant underperformance in the aftermath of today's Q3 2015 results."
Shares (Berlin: DI6.BE - news) in UBS, Switzerland's biggest bank, fell 5.4 percent. UBS posted a bigger than anticipated year-on-year rise in third quarter net profit, but watered down its full-year targets.
Some analysts expressed concerns over a lower than expected capital ratio and the fact that results had been flattered by a tax benefit.
In all, the STOXX Europe 600 Banking sector was down 1.4 percent, among the top sectoral fallers.
The pan-European FTSEurofirst 300 index and the euro zone's blue-chip Euro STOXX 50 index declined by 0.2 and 0.4 percent respectively.
VW shares fell 3 percent after an emissions scandal that has beset the German company widened to include its luxury brands Porsche and Audi (LSE: 0FG8.L - news) .
The U.S (Other OTC: UBGXF - news) . Environmental Protection Agency said late on Monday it was now also looking at 3.0-liter V6 diesel engines. Volkswagen (Other OTC: VLKAF - news) took issue with the findings, saying "no software has been installed" in such engines "to alter emissions characteristics in a forbidden manner."
Some traders and analysts said they would still avoid VW shares while the issue remained unresolved, with Credit Suisse (LSE: 0QP5.L - news) keeping an "underperform" rating.
"I would steer clear of any rebound in VW shares until the dust settles. At the moment, trading VW is like trying to catch a falling knife," said Mirabaud Securities' Rupert Baker.
Among risers, Shell forecast higher savings from its planned takeover of BG, boosting shares in both energy groups , while Swiss travel retailer Dufry (LSE: 0QK3.L - news) climbed 5 percent after reporting higher sales and profits.
