London: European shares fell early on Thursday as weak Chinese manufacturing data revived global growth concerns and hit miners, while euro zone banks continued to trim recent gains on uncertainty about if and when Spain would apply for a bailout.

Basic resources shares dropped 1.8% as data showed manufacturing activity in China, the world’s largest consumer of metals, continued to contract this month.

Miners Kazakhmis and Anglo American were the biggest losers, both falling 3.2%, while BHP Billiton shed 2.5%.

Euro zone banks also weighed, dipping 0.8% as Spain continues to hold off from applying for a bailout that would allow the European Central Bank to intervene on the debt market to tame Spain’s high borrowing costs.

The ECB’s pledge to intervene to support struggling countries was expected to help push Spain’s 10-year borrowing costs lower at an auction on Thursday. Still, yields were likely to remain uncomfortably high while Prime Minister Mariano Rajoy resists requesting a rescue that many regard as inevitable.

“Activity in China is still weak and the Europeans are scared to death," a Brussels-based trader said. “The Spanish situation is nerve-wracking but I think Spain’s problems are well known."

By 01:00 pm, the pan-European FTSEurofirst 300 index was down 0.4% at 1,111.66 points, while the euro zone blue chip Euro STOXX 50 index was 0.7% lower at 2,551.37 points.

The Euro STOXX 50 index has retreated by around 2.5% since hitting a five-month high on Friday but some traders said the recent rally, which saw the index gain 20% in less than two months, could resume as soon as Spain applied for a bailout.

“The recent breather was healthy and I think we can start going up again," a Milan-based trader said.

Germany’s Dax was down 0.5%, trimming some losses after data showed the country’s services industry picked up in September, bucking a broader contraction in the German private sector. Reuters