LONDON, Nov 2 (Reuters) - European shares hit a four-week low on Monday, extending the previous session's sharp declines on worries that the stock market had rallied ahead of economic recovery, with banks featuring among top losers.
By 0812 GMT, the FTSEurofirst 300 index of top European shares fell 0.9 percent to 968.19 points -- the lowest since early October. It fell 2.1 percent on Friday, the biggest one-day slide in nearly four months, hit by weak U.S. consumer sentiment data.
Banks were among the top losers, with HSBC, Barclays, BNP Paribas, Societe Generale and Credit Agricole down 0.3 to 2.3 percent.
Royal Bank of Scotland and Lloyds fell 4.2 and 13.7 percent respectively. The Daily Telegraph reported that the UK government will unveil plans this week to spend 30 billion pounds ($49.3 billion) buying further shares of rescued banks.
Financials also came under pressure on news that CIT Group Inc, a U.S. lender to hundreds of thousands of small and medium-sized businesses, filed for bankruptcy on Sunday, as the global financial crisis left it unable to fund itself and the recession hit its loans.
"Everybody is anxious and knows that the market went a little bit too fast," said Koen De Leus, economist at KBC Securities.
"To change that sentiment, we have to see much better macroeconomic figures because now company earnings won't be able to support the stock market anymore as results of the biggest companies are over," he added.
The index, which is up 16.5 percent so far in 2009, has gained 50 percent since hitting a record low in early March. (Reporting by Atul Prakash)