Economy worries push European shares lower

* FTSEurofirst 300 .FTEU3 falls 0.7 pct

* Banks extend declines

* Randgold Resources hits record high

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

By Brian Gorman

LONDON, Sept 23 (Reuters) - European shares fell on Thursday, extending their decline for a third day, as fresh euro zone data added to existing worries about the strength of the global economic recovery.

The pace of growth in the euro zone’s services and manufacturing sectors slowed much more than expected this month. [ID:nSLAMKE6DH]

At 0916 GMT the FTSEurofirst 300 .FTEU3 index of top European shares was 0.7 percent lower at 1,058.70 points, having been as high as 1,074.48 earlier in the session.

On Wednesday the index fell 1.5 percent to its lowest close in two weeks. The index has gained 3 percent in September, but is more than 5 percent off an April peak.

Across Europe, Britain's FTSE 100 .FTSE, Germany's DAX .GDAXI and France's CAC40 .FCHI fell between 0.7 and 0.9 percent. In a broad market decline, heavyweight banks extended their declines from the previous session, with Barclays BARC.L, Credit Suisse CSGN.VX and UBS UBSN.VX between 1.6 and 3.2 percent lower.


Later in the session market attention is expected to turn to U.S. weekly jobless and existing homes sales data for the latest reading on the state of the world’s biggest economy following the Federal Reserve’s downbeat assessment on Wednesday.

“There’s a fair bit to say indexes will stay in the range for now,” said Bernard McAlinden, investment strategist NCB Stockbrokers in Dublin. “Of all the data, the existing home sales is the most important. We need to see a significant bounce there to give markets any assurance.”

McAlinden also said the euro zone’s debt problems haven’t gone away. “Spain, Portugal, Greece, Ireland are under significant pressure in the coming months to put forward retrenchment measures in their budgets for 2011,” he said.


However, chemicals giant BASF BASF.DE was up 2 percent on Thursday, extending gains from the previous session, when it raised its 2010 sales outlook and said business in the third quarter was set to beat market expectations.

With gold hovering near a record high, Randgold Resources RRS.L rose 0.7 percent, and had earlier hit a record.

But other miners were lower, on worries about the demand outlook. Anglo American AAL.L, Rio Tinto RIO.L and Lonmin LMI.L fell between 1 and 1.3 percent.

Meanwhile Mitchells & Butlers MAB.L gained 1.1 percent, after the UK's biggest pub group reported a 4.4 percent increase in sales at outlets open for more than a year, driven by food.