European shares lower but FTSE rally continues, Luxottica hits one-year peak

MILAN (Reuters) - European shares were lower in early deals on Monday, weighed down by banking and auto stocks, though weakness in the pound helped Britain's FTSE rise to a fresh record high. Shares in Luxottica and Essilor both rallied more than 10 after agreeing on a 46-billion euro merger deal to create a global powerhouse in the eyewear industry. Luxottica hit a one-year high, while Essilor surged to its highest since the end of September. By 0816 GMT the pan European STOXX index <.STOXX> was down 1.3 percent, while the FTSE added 0.1 percent, with a stronger mining sector helping it touch a fresh record high. In the banking sector, the Italian banking index <.FTIT8300> underperformed with a fall of 1.5 percent after rating agency DBRS cut Italy's credit rating on Friday in a move which could raise their borrowing costs. (Reporting by Danilo Masoni, editing by Kit Rees)