Europe stocks close lower; financials fall

* FTSEurofirst falls 0.4 pct, lowest close since May 13

* Banking, insurance shares lose ground

* Drugmakers gain; GlaxoSmithKline up after drug deal

By Brian Gorman

LONDON, June 23 (Reuters) - European shares fell to their lowest close in nearly six weeks on Tuesday, with financials suffering most, and with home sales data in the United States casting further doubt on the strength of the economic recovery.

The FTSEurofirst 300 .FTEU3 index of top European shares fell 0.4 percent to 833.67 points, the lowest close since May 13. But it is still up more than 29 percent from its lifetime low on March 9.

The heavyweight banking and insurance sectors suffered from the renewed pessimism on economic recovery.

BNP Paribas (BNPP.PA), Banco Santander (SAN.MC), Barclays (BARC.L), Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE) and Standard Chartered (STAN.L) fell between 1.7 and 3.4 percent.

"After the sharp rally, my view was that there would be a minor correction," said Bob Parker, vice chairman of asset management at Credit Suisse.

"This will last until mid to late August. Markets were discounting too sharp an economic recovery. The pace of the recovery is going to be mediocre."

Sales of previously owned homes in the United States rose at a slower-than-expected pace in May, an industry survey showed. A separate survey of manufacturing sentiment from the Reserve Bank of Richmond gave mixed signals. [ID:nLN392294]

"It's right to say that the U.S. housing market is forming a bottom, but it's wrong to say that it's forming a bottom and is then going to recover sharply," said Parker.

European macroeconomic news was also downbeat.

French consumer spending fell unexpectedly in May and a recovery in the euro zone services sector stalled in June, with the Purchasing Managers Index slipping to 44.5. [ID:nLN873343]

Parker also pointed to worries about central banks' exit strategies.