European shares fall as economic jitters persist

* FTSEurofirst 300 falls 2 pct; lowest close in a week

* Banks down, Citi, BofA, GE results weigh

* Weak U.S. economic data adds to gloom

* BP gains after leaking well capped

By Harpreet Bhal

LONDON, July 16 (Reuters) - European shares fell on Friday, after downbeat U.S. economic data and disappointing results at Citigroup (C.N), Bank of America (BAC.N) and General Electric (GE.N) heightened concerns over the pace of economic recovery.

The pan-European FTSEurofirst 300 .FTEU3 index of top shares closed 2 percent lower at 1,012.94 points, ending the week at its lowest level since July 7.

The FTSEurofirst 300 shed 0.6 percent this week, as falls in the last two sessions eclipsed gains made earlier in the week, although the index is still up 2 percent so far this month.

U.S. companies Citigroup, GE and Bank of America reported better than expected quarterly earnings, but revenues fell from a year earlier. The two banks also reported lower investment banking profits. [ID:nN16144753] [ID:nN16265934]

Adding to concerns for recovery in the world's largest economy, data showed U.S. consumer prices fell for a third straight month in June while an indicator of consumer sentiment tumbled to an 11-month low in July. [ID:nN1653074]

"The central issue is which factors have the stronger effect on equity markets: the positive reports on earnings or the burden due to weaker leading indicators? We think that the negative effects from weaker economic indicators will dominate," said Tammo Greetfeld, equity strategist at UniCredit in Munich.

Banks were among the decliners, with Barclays (BARC.L), BNP Paribas (BNPP.PA) and Deutsche Bank (DBKGn.DE) down 3.1 to 5.2 percent.

In a closely watched move for the banking sector, European governments have agreed details of the criteria for judging whether their banks have passed the stress tests conducted on the region's banks, EU sources said. The results are set to be published on July 23. [ID:nBFA001241]

Jean-Claude Juncker, the chairman of euro zone finance ministers, said on Friday he was not expecting "any big catastrophes".

Across Europe, Britain's FTSE 100 .FTSE, Germany's DAX .GDAXI and France's CAC 40 .FCHI lost 1 to 2.3 percent.

BP SUPPORTS

On the upside, heavyweight oil major BP (BP.L) rose 1.3 percent, on hopes that it has at last capped the ruptured subsea well that has been spewing oil into the Gulf of Mexico for the past three months and can now begin the clean-up. [ID:nN15255571]

Among other decliners, Roche (ROG.VX) fell 4.2 after U.S. Food and Drug Administration briefing documents sparked concern the Swiss drugmaker's cancer treatment Avastin may be no longer be used to treat breast cancer in the United States. [ID:nN16136662]

Finnish utility Fortum's (FUM1V.HE) shed 5.5 percent as its second-quarter profits lagged forecasts due to a sluggish recovery in industrial power demand. [ID:nLDE66F07B]

The focus for next week is expected to remain on U.S. corporate earnings, with Goldman Sachs (GS.N) and Morgan Stanley (MS.N) due to report on Tuesday and Wednesday respectively. (Editing by Greg Mahlich)