Sovereign debt worries drag European shares lower

                                
 * FTSEurofirst 300 index slips 2.3 percent
                                
 * Commods hit by renewed China rate hike concerns
                                
 * Peripheral debt worries hit banks
                                
 
                                
 By Joanne Frearson
                                
 LONDON, Nov 16 (Reuters) - Europe's top shares posted on
Tuesday their biggest daily drop since July 1 and their lowest
close in nearly three weeks on concerns about sovereign debt in
the euro zone's peripheral economies.
                                
 Sentiment was knocked as Ireland came under intense pressure
to seek financial aid, with investors cautious ahead of an Irish
government statement on the economy after the markets closed and
the conclusion of a meeting of euro zone finance ministers.
                                
 In the event, the Irish government statement gave no further
details on a resolution for Ireland's problems.
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index of top
shares closed down 2.3 percent at 1,086.61 points.
                                
 The Euro STOXX 50 <.STOXX50E>, the euro zone's blue-chip
index, fell 2.3 percent to 2,781.77 points, below the 61.8
percent Fibonacci retracement of the index's fall from an April
high to a May low at 2,805.95 for the first time since October,
which is generally seen as a negative sign for equities.
                                
 "If there is a bailout, this will get rid of the
uncertainty, but if there is not, then investors will want
transparency on how it is going to survive without it," said
Angus Campbell, head of sales at Capital Spreads.
                                
 Banks, which are particularly sensitive to changes in the
economic landscape, were among the worst performers on the euro
zone debt worries, with the STOXX Europe 600 Banks <.SX7P> down
3.1 percent.
                                
 Lloyds Banking Group <LLOY.L>, Natixis <CNAT.PA> and Societe
Generale <SOGN.PA> were 4.5 to 4.7 percent lower.
                                
 In the peripheral countries, Ireland's <.ISEQ> bourse index
fell 1.7 percent, Spain's IBEX 35 <.IBEX> slipped 2.5 percent,
Portugal's PSI 20 <.PSI20> was down 0.6 percent, and Italy's
benchmark <.FTMIB> was 2.1 percent lower.
                                
 The Thomson Reuters Peripheral Eurozone Countries Index
<.TRXFLDPIPU> slipped 2.9 percent.
                                
 
                                
 MINERS HIT
                                
 Global recovery concerns also hit commodity stocks as
worries resurfaced that China might need to raise interest rates
again to cool its overheating economy.
                                
 The STOXX Europe 600 Basic Resources <.SXPP> index was down
5.1 percent, with Antofagasta <ANTO.L>, Kazakhmys <KAZ.L>, Rio
Tinto <RIO.L> and Xstrata <XTA.L> down 4.8 to 6.1 percent.
Economic concerns also hit crude prices <CLc1> and, in turn,
the oil stocks; BP <BP.L>, BG Group <BG.L>, Royal Dutch Shell
<RDSa.L>, Total <TOTF.PA> and Cairn Energy <CNE.L> were down 2.1
to 3.8 percent.
                                
 Steel makers were also hit by concerns over China
rate-tightening. ArcelorMittal, Germany's ThyssenKrupp
<TKAG.DE>, Salzgitter <SZGG.DE> and Spain's Acerinox <ACX.MC>
were down 2.6 to 4.7 percent.
                                
 Across Europe, the FTSE 100 <.FTSE> index was down 2.4
percent, Germany's DAX <.GDAXI> was 1.9 percent lower, and
France's CAC 40 <.FCHI> was down 2.6 percent.
 (Reporting by Joanne Frearson; Editing by Will Waterman)