RPT-European shares slip on banking worries

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* FTSEurofirst 300 index down 0.4 percent

* Banks slip after WSJ report, Basel

* Miners down on tax worries

* For up-to-the minute market news, click on [STXNEWS/EU]

By Joanne Frearson

LONDON, Sept 7 (Reuters) - European shares slipped on Tuesday to move below a key index retracement level, with banks lower after a Wall Street Journal report on the recent stress tests renewed concerns over the sector's health.

Worries over capital reform in banks also weighed on the sector. The Basel committee, in charge of drawing up global banking rule, is set to discuss planned reform on Tuesday.

German weekly Die Zeit, quoting a draft proposal from the Basel Committee, reported that global banks will be required to hold Tier 1 capital of 9 percent, including a 3 percent so-called "conservation buffer".

Banking stocks fell, with the STOXX Europe 600 Banks .SX7P index 1.2 percent lower. Credit Agricole (CAGR.PA), Commerzbank (CBKG.DE), Deutsche Bank (DBKGn.DE) and BNP Paribas (BNPP.PA) fell 1.5-2.7 percent.

The Wall Street Journal said Europe's recent stress tests of the strength of major banks understated some lenders' holdings of potentially risky government debt.

By 0849 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was down 0.4 percent at 1,061.27 points.

"There still is some doubt about economic growth in the second half," said Koen De Leus, economist at KBC Securities. "We have just had a relief rally and investors are waiting to see what direction the economy is going to take in the second half."

British bank Barclays (BARC.L) fell 3.2 percent. The bank said Bob Diamond, head of its investment and wealth management business Barclays Capital, would succeed John Varley as group chief executive next year.

"There is uncertainty triggered by the shake-up at Barclays, rumours of capital increases and uncertainty ahead of Basel III," Frank Schneider, trader at Alpha Trading in Frankfurt, said.

MINERS FALL

Mining shares slipped after Australian Prime Minister Julia Gillard secured a second term in office. Her government is vowing to press ahead with a new mining tax. [ID:nSGE6850I3]

BHP Billiton (BLT.L) and Rio Tinto (RIO.L), which are also listed in Australia, fell 0.9 percent and 1.4 percent respectively. Anglo American (AAL.L), Antofagasta (ANTO.L), Eurasian Natural Resources Corporation (ENRC.L) and Xstrata (XTA.L) were down 0.9-2.3 percent.

On the upside, Invensys (ISYS.L), tipped to fall out of the FTSE 100 index in this week's reshuffle, added 2.9 percent, with traders citing a report the company was a takeover target.

Tullow Oil (TLW.L) rose 2.2 percent after traders cited speculation in the press of bid rumours from ExxonMobil (XOM.N) and China Offshore Oil Corporation.

Meanwhile, the technical picture looked bearish. The Euro STOXX 50 .STOXX50E, the euro zone's blue-chip index, fell 0.9 percent to 2,729.83 points, slipping below the 50 percent Fibonacci retracement of a fall to a low in May from a high in April, seen as a negative sign.

Across Europe, the FTSE 100 .FTSE index was down 0.8 percent, Germany's DAX .GDAXI was 0.8 percent lower and France's CAC 40 .FCHI was down 1.1 percent.

The Thomson Reuters Peripheral Eurozone Countries Index .TRXFLDPIPU fell 2 percent. (Reporting by Joanne Frearson; Editing by Dan Lalor)