* FTSEurofirst 300 closes 0.7 percent lower
* Subdued trading, with London closed
* Euro zone consumer prices fall less than forecast
By Brian Gorman
LONDON, Aug 31 (Reuters) - European shares closed lower on
Monday, dragged down by falls in China and the United States,
where financials slipped after a strong run.
The FTSEurofirst 300 <> index of top European shares
fell 0.7 percent to close at 972.02 points, after hitting a
10-month high on Friday. The London market was closed for a
holiday and will resume trading on Tuesday.
The index rose 4.7 percent in August and is up more than 50
percent from its lifetime low on March 9, as investors have
become more confident on the prospects of economic recovery.
"There's been a pull-back in Europe after a good performance
last week. Commodity prices are on the retreat following the
performance of Asian markets this morning," said Gerhard
Schwarz, head of global equity strategy at UniCredit, in Munich.
"With the UK markets closed, we are a bit directionless."
The market would get direction from the European Central
Bank's statement on Thursday and from U.S. labour data due
Friday, he said.
Financials fell, notably in Ireland, hit by worries the
government will not pay lenders the full price for commercial
property loans when they are transferred over to a state-run
"bad bank". []
Bank of Ireland <BKIR.I> and Allied Irish Banks <ALBK.I>
fell 7.8 percent and 4.9 percent respectively.
BNP Paribas <BNPP.PA>, Banco Santander <SAN.MC>, Deutsche
Bank <DBKGn.DE>, Intesa Sanpaolo <ISP.MI>, Societe Generale
<SOGN.PA> and UniCredit <CRDI.MI> fell between 1 and 2.3
percent.
Oil prices <CLc1> tumbled 4 percent to below $70 a barrel as
a fall in China's key stock index stoked worries about the
country's economy. Royal Dutch Shell <RDSa.AS>, Total <TOTF.PA>
and StatoilHydro <STL.OL> lost 0.5-2.9 percent.
Automakers <.SXAP> were also weaker in Europe, down 1.4
percent, and Porsche <PSHG_p.DE> lost 3.2 percent.
About 370,000 employees of Volkswagen and Porsche plan to
take a stake of up to 5 percent in the automotive group, VW's
labour chief Bernd Osterloh told German newspaper Sueddeutsche
Zeitung in an interview. []
ARCELORMITTAL FALLS
Steelmaker ArcelorMittal <ISPA.AS> eased 2.8 percent. The
company said prices have improved but it would take one or two
years for production levels worldwide to return to 2008 levels.
[]
Chinese stocks <> sank 6.7 percent to a three-month
closing low and recorded their second-biggest monthly loss in 15
years. Chinese share trading is largely cut off from global
markets but the big drop in Shanghai had a psychological
knock-on.
Back in Europe, euro zone consumer prices fell for the third
month running year-on-year in August but by less than the record
drop in July, and economists expect them to start growing again
in coming months.
Among other individual movers in Europe, Deutsche Post
<DPWGn.DE> fell 1.8 percent, after Juergen Gerdes, the head of
the company's mail unit, said it needed to cut costs to avoid
losses over the long run.
French Vivendi <VIV.PA> rose 0.5 percent, ahead of results
on Tuesday and buoyed by an upgrade to 'buy' from 'add' from
Oddo.
Across Europe, Germany's DAX <> and France's CAC-40
<> fell 1.0 and 1.1 percent respectively.
As European bourses were closing, the Dow Jones <>, S&P
500 <.SPX> and Nasdaq Composite <> were down 0.9-1.3
percent.
(Additional reporting by Dominic Lau; Editing by Dan Lalor)
