A key gauge of Europe's investor 'fear', the Euro STOXX 50 volatility index, jumped 10.5 percent to its highest level in a week on global growth concerns. The higher the volatility index, which is based on sell- and buy-options on the Euro STOXX 50, the lower investor appetite for risk. Europe's biggest bank, HSBC fell 3.4 percent to become a standout loser on Britain's FTSE 100 after pretax profit came in just below analysts' average forecast. "Costs are still an issue for HSBC which is concerning for investors," Gary Greenwood, analyst at Shore Capital which has a "hold" recommendation on the stock, said. "It is trading on 1.3 times tangible book and the outlook for return on equity is not a significant improvement from where we are now. The shares are not obviously cheap." Italian banks were also majors losers in Europe after Italy lifted its ban on the short-selling of financial stocks, with UniCredit, UBI, Banco Popolare and Intesa Sanpaolo down 2.9 to 6 percent. However, this week's European Central Bank second Long-Term Refinancing Operation (LTRO) could tempt investors back into the banking sector. "A very large LTRO number suggests high beta, risk-on bank names will continue to rally," Berenberg Bank said in a note. "If the number is closer to the 500 billion euro consensus, then we would focus on the safer end of our bar-bell again such as Swedbank." By 1238 GMT, the pan-European FTSEurofirst 300 index of top shares was down 0.8 percent at 1,068.20 points, but the index is still up more than 25 percent since it hit a low in September 2011. GLOBAL GROWTH WORRIES Concerns about growth weighed on cyclical stocks as the oil price hovered near 10 month highs on supply disruption fears due to tensions in the Middle East. Sentiment was also hit by worries about growth in the euro zone after Europe was told to put more cash in to fight the euro zone debt crisis if it wants help from the rest of the world in a G20 meeting. Carmakers, which need strong growth and consumer demand to perform well, were the worst hit, with the STOXX Europe 600 Automobiles & Parts index down 2.6 percent. But the auto index is still up 28.9 percent this year on expectations demand was improving. "Oil price is a dampener on the session and disappointment from G20 on the weekend, people were expecting the non-European members to stump up some cash," Angus Campbell, head of sales at Capital Spreads, said. "Obviously a slowdown in global growth will have a knock on effect for companies reliant on global trade." He added that the market might fall a few more percentage points, but expected this will act as a buying opportunity as the uptrend remained intact, with major indices still up by more than 20 percent.