European shares hit their lowest close in 11 months on Tuesday as weak global growth replaced the US debt ceiling row as investors' main concern and banks fell on worries about the eurozone peripheral debt crisis. The pan-European FTSEurofirst 300 index of top shares fell 1.8 percent to 1,048.71 points, the biggest one-day fall since March and the lowest close since late August 2010.
Stocks fell across the board, with miners major losers on worries about demand after recent data, including US GDP figures, highlighted weak growth. The STOXX Europe 600 Basic Resources Index fell 2.5 percent. Copper producer Xstrata fell 3.6 percent, in spite of strong results.
"The biggest worry is the trajectory of the world economy, which appears to be stalling," said James Buckley, a fund manager at Baring Asset Management, which has 30 billion pounds ($48 billion) under management. The STOXX Europe 600 Banking Index fell 2.5 percent, hitting a 26-month low, on renewed concern about eurozone peripheral debt levels.
The sector has lost nearly 16 percent this year, on worries about contagion in the eurozone debt crisis. The Thomson Reuters Peripheral Eurozone Banking Index fell 3.9 percent. Italian heavyweights Intesa SanPaolo and UniCredit fell 5.2 and 5.8 percent respectively.
Credit Suisse and UBS, which missed out on Monday's slide as it was a holiday in Switzerland, fell 7.4 and 7.7 percent respectively on Tuesday. Across Europe, Britain's FTSE 100 fell 1 percent, while Germany's DAX and France's CAC40 fell 2.3 and 1.8 percent respectively.
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