* FTSEurofirst 300 down 1.6 pct at one-month closing low
* U.S. existing home sales drop to 15-yr low in July
* CRH falls; warns on profit due to faltering U.S. economy
* Oil majors among biggest fallers as crude slips to $72
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By Harpreet Bhal
LONDON, Aug 24 European shares fell to a
one-month closing low on Tuesday as disappointing U.S. housing
data underscored concern over the pace of recovery in the
world's largest economy.
The pan-European FTSEurofirst 300 .FTEU3 index of top
shares closed down 1.6 percent at 1,019.52 points, its lowest
close since late July, after ending higher a day earlier on a
pick-up in merger and acquisition activity.
Data showed sales of existing U.S. homes fell more steeply
than expected in July to a 15-year low, suggesting the economic
recovery could be losing momentum. [ID:nN24249810]
The downbeat data also drove investors into safe-haven
bonds, with German Bund futures hitting a new record high.
Volumes on the FTSEurofirst 300 were thin at 70 percent of
the index's 90-day daily average due to the holiday season.
"Markets are reacting far stronger than you would expect due
to low volumes, and because people have lost confidence," said
Lothar Mentel, chief investment officer at Octopus Investments.
"There is a lack of belief that the strength that we have
seen over the first two quarters will continue into the next
two," he said.
Economy worries weighed on construction and materials stocks
.SXOP, with Ireland's CRH (CRH.I) plunging 16.6 percent after
warning earnings would fall this year due to a faltering U.S.
Within the sector, HeidelbergCement (HEIG.DE), Holcim
HOLN.VX and Wolseley (WOS.L) dropped 1.3 to 5.1 percent.
Lafarge LAFP.PA shed 4.4 percent after broker BofA Merril
Lynch downgraded its recommendation on the stock to
"underperform" from "neutral".
Concerns over the economic recovery also pressured oil
majors, with a fall in crude prices CLc1 to $72 a barrel --
its lowest since early July -- also weighing on the sector.
The STOXX Europe oil and gas index .SXEP fell 2.3 percent,
with BP (BP.L), Royal Dutch Shell (RDSa.L) and Total (TOTF.PA)
declining 1 to 3.4 percent.
Vedanta Resources (VED.L) was among the biggest fallers in
the mining sector, down 7.6 percent after India's environment
ministry rejected a plan by the group to mine bauxite in an
eastern Indian state. [ID:nSGE67N06M]
Within the sector, Kazakhmys (KAZ.L), Xstrata XTA.L, Rio
Tinto (RIO.L) and BHP Billiton (BLT.L) lost 1.5 to 4.3 percent,
with worries over the demand for metals pressuring the sector
following the disappointing U.S. home sales data.
"Concern over global economic recovery continues to dominate
traders' sentiment, and as risk appetite ebbs away, equity
prices seem to be in danger of going into free fall," said Ben
Critchley, sales trader at IG Index.
Bucking the weak trend, Associated British Foods (ABF.L)
rose 3.4 percent on a positive broker note from Jefferies
International, which said the firm offered excellent deep value.
Lindt & Spruengli (LISN.S) rose 2.8 percent after the Swiss
chocolate-maker posted better-than-expected first-half results,
and said it expected to return to its long-term growth targets
next year. [ID:nLDE67M1I7]
Across Europe, Britain's FTSE 100 .FTSE, Germany's DAX
.GDAXI and France's CAC 40 .FCHI were down 1.3 to 1.8
(Editing by Will Waterman)