Weak banks push Europe shares to 1-mth closing low

                                
 * FTSEurofirst 300 down 1.2 pct, hits 1-month closing low
                                
 * Financials among top losers, UBS slips 5.8 pct on results
                                
 * Energy, mining shares fall; automaker BMW down 6.3 pct  
                                
 By Atul Prakash
                                
 LONDON, Nov 3 (Reuters) - European shares hit a one-month
closing low on Tuesday as disappointing results from Swiss
lender UBS <UBSN.VX> and a move by Britain's Royal Bank of
Scotland <RBS.L> to join a government scheme hurt financials.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
ended 1.2 percent down at 968.93 points, the lowest closing
level since early October. The index, which slumped 45 percent
last year, is still up 16 percent in 2009 and has surged 50
percent since hitting a record low in early March.
                                
 The VDAX-NEW volatility index <.V1XI> rose to a six-week
high. The higher the index, which is based on sell and buy
options on Frankfurt's top-30 stocks <0#.GDAXI>, the lower is
the desire for risk.
                                
 Financials were among the biggest losers. The DJ STOXX
European bank index <.SX7P>, which has spiked 150 percent since
hitting a floor in March, was down 3 percent after touching its
lowest level since mid-August.
                                
 "People are worried about the banking sector once again
because we have had a couple of European results that were
somewhat worse than expected," said Luc Van Hecka, chief
economist at KBC Securities.
                                
 "In this market, once you have had a run up of about 60
percent, it's nothing unusual that you get some temporary
corrections and it could be easily 10 to 15 percent. But
fundamentals are still such that this will not go too far."
                                
 UBS fell 5.8 percent after higher-than-expected accounting
charges pushed it into its fourth consecutive quarterly loss and
disappointing net withdrawals of 36.6 billion Swiss francs ($36
billion) at its key wealth and asset management business.
                                
 A shake-up of British banks -- Royal Bank of Scotland and
Lloyds Banking Group <LLOY.L> -- and the European Commission's
estimates after results of stress tests in the banking sector
showing losses could amount to 400 billion euros ($590.9
billion) in 2009-2010 raised questions about the sector.
[ID:nL3540088]
                                
 RBS was down 7 percent after hitting a six month low earlier
in the session. It said it would join the government's asset
protection scheme (APS) which is designed to insure riskier
loans and accept punitive disposals and caps on its activities.
                                
 Lloyds, however, gained 2.7 percent on relief that a record
13.5 billion pound ($22 billion) rights issue would mean it can
stay out of the government scheme.
                                
 Other banks were also down, with Standard Chartered
<STAN.L>, HSBC <HSBA.L>, Barclays <BARC.L>, BNP Paribas
<BNPP.PA>, Societe Generale <SOGN.PA>, Credit Agricole <CAGR.PA>
and Bank of Ireland <BKIR.I> falling 1.8 to 11.8 percent.
                                
 
                                
 COMMODS DOWN, DATA LIMITS LOSSES 
                                
 Commodity shares also fell in line with the broader market
trend. Miner BHP Billiton <BLT.L>, Anglo American <AAL.L>,
Xstrata <XTA.L> and ENRC <ENRC.L> fell 1.2 to 2.6 percent, while
oil major BP <BP.L>, Royal Dutch Shell <RDSa.L> and Repsol
<REP.MC> were down 0.6 to 2.1 percent.
                                
 But positive economic data limited losses. New orders
received by U.S. factories beat expectations to rise 0.9 percent
in September, while Redbook Research said U.S. chain store sales
rose 0.9 percent last week.[ID:nNYS007494] [ID:nN02454734]
                                
 Investors took comfort from news that Warren Buffett's
Berkshire Hathaway Inc <BRKa.N> <BRKb.N> will pay $26 billion to
buyout railroad Burlington Northern Santa Fe Corp <BNI.N> in
what the billionaire investor called a bet on the U.S. economy.
[ID:nN03483590]
                                
 "It is set to be a blockbuster week from here in as rate
decisions and jobs reports are released," said David Jones,
chief market strategist at IG Index.
                                
 "We could well see yet more volatility and aggressive price
movements, but we could also see this week dictate not only
short term direction, but the direction for the rest of the
year," he added.
                                
 The U.S. Federal Open Market Committee's two-day meeting on
interest rate policy, starting late on Tuesday, is expected to
leave rates close to zero.
                                
 Germany's BMW <BMWG.DE> fell 6.3 percent after it gave a
tepid markets outlook after third-quarter earnings before
interest and tax shrank 86 percent. [ID:nL2426759]
                                
 Across Europe, Britain's FTSE 100 index <.FTSE>, Germany's
DAX <.GDAXI> and France's CAC 40 <.FCHI> fell 1.3-1.5 percent.
                                
 (Editing by Elaine Hardcastle)