European shares tumble as commods, banks slide

LONDON, Dec 1 (Reuters) - European shares slumped on Monday, pressured by banks and commodity stocks, as mounting concerns about a prolonged global slowdown and weaker demand for oils and metals hurt market sentiment.

The FTSEurofirst 300 .FTEU3 index of top European shares provisionally closed 6.3 percent down at 808.13 points after rising 13 percent last week. The benchmark is down 46 percent so far this year after posting gains in the previous five years.

Banks were the worst hit, with Standard Chartered Bank (STAN.L) falling 14.7 percent and UBS (UBSN.VX) down 12 percent. Commodities slipped due to an 8 percent drop in crude and a 2.8 percent fall in aluminium prices on worries about global growth.

"The short-term outlook is going to be very difficult, given the weakening growth forecast, falling corporate profitability and the softening labour market," said Henk Potts, equity strategist at Barclays Stockbrokers.

"What the market would need to see is the practical implication of the measures that have been announced starting to work through the system and having a positive result."

A United Nations report said that world economic growth would slow to 1 percent in 2009 from 2.5 percent this year as the financial crisis bit, and the global economy might even contract if stimulus packages proved too little too late.

European and Chinese industry activity slumped in November, Japanese officials said their economy was slowing rapidly and euro zone finance ministers gathered to discuss plans to curb recession. U.S. construction spending also fell a 1.2 percent in October, steeper than the market had expected.

Miners tracked weaker metals prices. BHP Billiton (BLT.L), Anglo American (AAL.L), Vedanta Resources (VED.L), Lonmin (LMI.L), Kazakhmys (KAZ.L), Xstrata (XTA.L), Antofagasta (ANTO.L) and Rio Tinto (RIO.L) fell between 7 and 18 percent.

Energy stocks were also down. BP (BP.L), Royal Dutch Shell (RDSa.L), gas producer BG Group (BG.L) and Tullow Oil (TLW.L) shed between 5.8 and 8.6 percent. (Reporting by Atul Prakash)