European shares slip back to 2016 levels as Wall St support evaporates

* STOXX 600 down 1.75 pct, set for worst year since 2008

* All sectors, national indexes down on the day

* Italian banks fall as Carige cash call blocked

By Danilo Masoni and Julien Ponthus

MILAN, Dec 27 (Reuters) - European shares fell on Thursdayas the impact of a record bounce on Wall Street provedshort-lived amid persistent worries about a slowing globaleconomy and a trade spat between Washington and Beijing.

The pan-European STOXX 600 .STOXX index fell 1.75 percentto its lowest level since November 2016. It had risen as much as0.5 percent in early trading but fell back into negativeterritory after about an hour.

By the close in Europe, the Dow Jones Industrial Average hadgiven up over a quarter of its more than 1,000-point gain of theprevious session, after data showed consumer confidence inDecember fell to its lowest level since July.

"There is little visibility," said Oddo Securities traderMikael Jacoby, citing the recent negative newsflow and weakdata.

"To call for a bottom, we need at least a couple of days ofstrength, not just in price, but also in trading volume, breadthof the market, and a fundamentally supported environment," alsosaid FXTM strategist Hussein Sayed.

"So far we don't see a shift in fundamentals. Trade tensionsbetween the U.S. and China remains the biggest unknown factorfor 2019," he added.

Data earlier showed earnings at China's industrial firms inNovember dropped for the first time in nearly three years,pointing to a further loss of economic momentum.

All sectors and national indexes in Europe were in the red,with thin holiday volumes helping to make trading more volatile.

The euro zone's volatility gauge .V2TX was up to itshighest levels since markets sustained a correction lastFebruary.

The STOXX 600 benchmark remains set for its worst year since2008, having fallen 15.3 percent in the year to date.

Germany's DAX .GDAXI index, whose big exposure to Chinahas made it particularly vulnerable to trade jitters, is down19.6 percent this year, while Italy's FTSE MIB .FTMIB , weigheddown by concerns over the country's public finances, is down17.3 percent. The Brexit-hit FTSE .FTSE is down 14.5 percent.

Italian banks .FTIT8300 fell 1.13 percent, coming underfresh pressure after the top shareholder at Banca CarigeCRGI.MI put the troubled lender's future into question byblocking a 400 million euro ($456 million) new share issue.

Elsewhere, shares in VinciSGEF.PA rose 0.2 percent afterthe French construction group said it was buying a majoritystake in London'sGatwick airport for about 2.9 billion pounds($3.7 billion).

Among smaller companies. EarthportEPO.L more than trebledits value, jumping 279 percent after Visa V.N said it wouldpay 198 million pounds to buy the British payments firm.

($1 = 0.8778 euros)

($1 = 0.7915 pounds) (Reporting by Danilo Masoni; Editing by Mark Potter and HughLawson) ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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