* FTSEurofirst 300 down 0.6 percent; hits five-week low
* Moody's downgrade of Spain hurts market sentiment
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By Harro ten Wolde
Frankfurt, March 10 (Reuters) - European shares were lower on Thursday as renewed worries about peripheral euro zone economies overshadowed strong company earnings and weak Chinese data hit miners.
At 1209 GMT, the FTSEurofirst 300 index of top European shares was down 0.6 percent at 1,137.54 points after touching 1,133.55 -- the lowest since late January.
Spain's benchmark stock index IBEX, down 1.2 percent, underperformed the wider market after Moody's downgraded the country's sovereign debt rating.
Italy's FTSE MIB was down 1 percent and the Thomson Reuters Peripheral Eurozone Countries Index dropped 1.5 percent.
"With today's downgrade of Spain by Moody's with a negative outlook and China's unexpected trade deficit indicating growth slowing down, (the) DAX was showing further decline," said Anita Paluch, a Frankfurt-based trader for ETX Capital.
Moody's cut Spain's sovereign credit rating by a notch and warned of further cuts, saying the country's plans to clean up the battered banking sector will cost more than the government expects and will add to its debt burden.
Frank Schneider, a trader at Alpha Trading, said he expected bond spreads to widen further, negatively impacting both equities and bond markets following Moody's move.
"The questions we are now asking are how many European countries can afford to be downgraded and bailed out. It is clear that unemployment is still a key problem and that may be the first step to improving the situation in ailing countries," he said.
BANKS, MINERS SLIP
Stocks showed little reaction after the Bank of England left interest rates, as expected, at a record low of 0.5 percent.
"Going forward, we are aware of risks that the first rate hike might come much earlier than in the summer, which we are currently projecting ... However, the growth outlook remains too uncertain at this stage," said Chiara Corsa, economist at UniCredit.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 were down 0.7 to 1.1 percent.
Banks and miners were among the biggest decliners, with the European banking sector index falling 1.1 percent. Allied Irish Banks was down 5.2 percent, while Spanish banks Banco Santander and BBVA fell 2.4 percent and 1.7 percent respectively.
Miners fell on weak Chinese import data casting doubt on demand for raw materials. Figures showed China swung to a surprise trade deficit in February of $7.3 billion, its largest in seven years.
The STOXX Europe 600 Basic Materials index fell 2.7 percent, while BHP Billiton dropped 3.2 percent.
Delhaize rose more than 4 percent to an eight-month high after the Belgian supermarket group beat market expectations for profit in the fourth quarter.
Linde and Deutsche Post, up 0.5 percent and 1.8 percent respectively, were at the top of a 0.8 percent weaker German blue-chip index after boosting dividends.
(Additional reporting by Josie Cox; Editing by Erica Billingham)