* FTSEurofirst 300 index down 0.3 percent
* Insurers hit by nuclear plant explosion
* Aggreko gains on plant blast
* For up-to-the minute market news, click on [STXNEWS/EU]
By Joanne Frearson
LONDON, March 14 (Reuters) - European shares fell on Monday to their lowest level in three months as investors worried about the impact of Friday's earthquake and tsunami in Japan.
By 1003 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was down 0.3 percent at 1,119.48 points after hitting its lowest close since Dec. 31 2010 on Friday.
Insurers such as Munich Re (MUVGn.DE) were among the biggest decliners on concern about the cost of the Japanese disaster, while companies in the nuclear sector dropped on worries of increasing safety costs and Renault (RENA.PA) fell as partner Nissan (7201.T) closed plants in Japan.
On the technical front the index found support at the 61.8 pct retracement level of the November-February uptrend after breaching it earlier in the session.
A hydrogen explosion at the No. 3 reactor of the quake-hit Fukushima Daiichi nuclear power plant has left authorities scrambling to prevent a meltdown, with analyst fearing that the potential costs to businesses could soar. [ID:nL3E7EC0D6]
Lothar Mentel, chief investment officer at Octopus, which has 2.5 billion sterling ($4 billion) assets under management, said investors would wait and see how the nuclear situation in Japan develops but he was not "seeing any necessity to change European portfolios" for the time being.
Mental said investors might start to re-focus their attention on the positive developments in the euro zone with the bailout fund.
Over the weekend, European leaders reached an unexpected agreement to strengthen the bloc's bailout fund, make its loans cheaper and lower the interest rate on funds extended to Greece.
The insurance sector was hardest hit by the earthquake, extending declines from the previous session as risk modeling company AIR Worldwide said the insurance cost of the quake could reach $35 billion even before the tsunami is accounted for. [ID:nL3E7EE0AQ]
The STOXX Europe 600 Insurance .SXIP fell 0.8 percent, with Swiss re RUKN.VX, Hannover Re (HNRGn.DE) and Munich Re down 3.3 to 4.6 percent in volumes of between 144.4 and 303.2 percent of the 90-day averages.
But JPMorgan said in a note any weakness on the reinsurance could be a buying opportunity, because large losses following natural disasters normally lead to price rises.
Companies involved in the nuclear sector were also tumbled as the crisis reignited concerns over safety in the area.
French reactor maker Areva CEPFi.PA dropped 7.9 percent, with volumes at 430.6 percent of its 90-day average and nuclear power producer EDF (EDF.PA) was down 3.7 percent, with volume at 193.3 percent of its 90 day-average.
"There are further worries about aftershocks and tsunamis and the possible costs to businesses. There are fears how these nuclear reactors can cope and any negative news will certainly weigh on the market," Matt Brown, trader at Catalyst Markets said.
Investors favoured renewable energy stocks instead on hopes there would be a faster shift towards the area following the nuclear concerns.
Traders bought SolarWorld SWVG.DE, which jumped 11.9 percent, and Nordex (NDXG.DE), which soared 18.9 percent, with volumes more than double their 90-day average.
Elsewhere Aggreko (AGGK.L) gained 5 percent, with volume at 100 percent of its 90-day average on hopes demand would increase for the temporary power provider after the nuclear power plant explosion.
Carmakers were also among the worst performers, with Renault down 3.3 percent as Nissan, which the company has a significant stake in, dropped 9.5 percent in Tokyo, after it shut all four of its auto assembly plants in Japan.
The VDAX-NEW volatility index .V1XI, one of Europe's main barometers of anxiety, rose 6.5 percent as investors fretted about the impact of Japan's earthquake.