* FTSEurofirst 300 index falls 2.4 percent
* Shell falls on profit warning talk; BP rises
* Banks slip over worries of global economic recovery
* For up-to-the minute market news, click on []
By Joanne Frearson
LONDON, July 1 (Reuters) - European shares fell for a third
consecutive session to hit a five-week closing low on Thursday,
as worries over the global economic recovery intensified after
U.S. jobless, home sales and factory data disappointed.
Financials featured among the worst performers, with the
STOXX Europe 600 banking index <.SX7P> falling 2.6 percent. HSBC
<HSBA.L>, BNP Paribas <BNPP.PA> and Barclays <BARC.L> fell 2.6
to 5.6 percent.
The pan-European FTSEurofirst 300 <> index of top
shares closed down 2.4 percent at 969.21 points. The Euro STOXX
50 <>, the euro zone's blue-chip index, fell 2.1
percent to 2,518.65 points.
"We got some nasty figures out of the U.S. today. The
jobless number was higher than expected and the home sales and
(the) ISM (Institute for Supply Management) manufacturing
(index) were below expectations," said Philippe Gijsels, head of
research at BNP Paribas Fortis Global Markets in Brussels.
In the United States, new claims for state jobless benefits
unexpectedly rose last week, while manufacturing activity and
employment slowed in June, heightening fears the U.S. economic
recovery is stalling. []
"This, together with the figures from China that growth is
slowing, puts the double dip fears back into the market.
Technical analysis does not look too good and there are sell
signals everywhere."
An official survey showed the pace of Chinese manufacturing
activity slowed in June to the lowest since February, while
HSBC's separate purchasing managers' index dropped to a 14-month
low, with outright drops in output and new orders.
Meanwhile, Royal Dutch Shell <RDSa.L> fell 4.5 percent, with
traders citing market talk the company could lower its guidance.
Shell declined to comment.
BP GAINS
On the upside, BP <BP.L> shares rose 2.8 percent after
traders cited talk that the oil giant had capped the leaking
well in the Gulf of Mexico.
A BP spokesman said he was not aware of any developments on
progress in capping the oil spill.
However the technical picture looked bearish. "I am quite
concerned at the way these major indices are breaking down
through support areas and it bodes ill for the rest of the
summer. I am nervous," said Bill McNamara, technical analyst at
Charles Stanley.
He said it appeared that the Euro STOXX 50 index was likely
to test its May low of 2,448. A breach of the level would open
the next downside target of 2,400, its 50 percent Fibonacci
retracement of a rally from March 2009 until January this year.
Across Europe, the FTSE 100 <> index was down 2.3
percent, Germany's DAX <> fell 1.8 percent and France's
CAC 40 <> was down 3 percent.
Spain's Ibex 35 index <> was only down 0.9 percent.
Spain sold 3.5 billion euros ($4.28 billion) of a five-year bond
on Thursday, at the top end of the Treasury's target amount,
which analysts said fared well despite Moody's placing Spain on
review for a potential downgrade on Wednesday. []
The Thomson Reuters Peripheral Eurozone Countries Index
<.TRXFLDPIPU> was up 0.4 percent.
(Additional reporting by Atul Prakash; Editing by Sharon
Lindores)
($1=.8172 Euro)
