European shares fall to 3-month closing low

LONDON: European shares fell to a fresh three-month closing low on Thursday, as higher-than-expected weekly US jobless claims intensified worries about the strength of the recovery in the world's biggest economy.

Greece's debt crisis also hurt sentiment, though strategists said more clarity on a funding package might help spark a rebound in equities.

The FTSEurofirst 300 index of top European shares unofficially ended the session 1.5 percent down at 1,075.21 points, the lowest close since mid-March.

The banking sector, exposed to Greek debt, was the biggest casualty, with the STOXX Europe 600 Banking Index falling 2.7 percent.

"There's lot of nervousness, and fragility, on slowing growth issues and whether this will hurt the earnings outlook," said Bill Dinning, head of investment strategy at Aegon Asset Management in Edinburgh, which has 48.8 billion pounds under management.

But he said equities might rebound, supported by "valuation measures that are not particularly frothy" and "if there were some clarity about whether Greece's austerity measures will be passed".

Copyright Reuters, 2011