* FTSEurofirst 300 up 0.3 percent after 8-week closing low
* Financial shares among top losers, energy stocks up
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By Atul Prakash
LONDON, Nov 30 (Reuters) - European shares drifted higher on Tuesday from the previous day's eight-week closing lows, though persistent worries that the debt crisis could spread to other weak euro zone countries forced investors to stay cautious.
At 0955 GMT, the FTSEurofirst 300 index of top European shares was up 0.3 percent at 1,072.66 points. On Monday, it dropped 1.6 percent, the lowest close since early October as Ireland's bailout failed to calm jittery investors.
Energy shares featured among the top gainers, with the STOXX Europe 600 Oil & Gas index up 0.8 percent. Total rose 1.2 percent after the firm said it got approval for the second phase of its North Sea project. BG Group gained 1.7 percent, while Repsol was up 1 percent.
"The increase we are seeing this morning is merely technical from short-term oversold levels and comes on the back of the little rebound from the lows we saw yesterday evening on Wall Street," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, in Brussels.
The FTSEurofirst 300 has slipped 4.6 percent in three weeks, with its relative strength index (RSI) currently at 41. A move towards 30 is an indication that an asset may be getting oversold, while a level of 70 signals overbought conditions.
"Looking forward, things remain quite uncertain and volatility is likely to persist and even increase. There seems to be no quick fix for the worries in the euro zone," Gijsels said, adding that Ireland's bailout did not bring spreads down.
Analysts said there was still too much debt in the system and the market was expected to continue to see an investment environment with a lower average return and higher volatility.
Financial shares were among the top losers, with the STOXX Europe 600 banking index falling 0.8 percent. Banco Santander, Allied Irish Banks and Natixis fell 1.4 to 5 percent.
"Sentiment remains very fragile, with difficulties in Europe still dominating and investors quick to book profits," said Keith Bowman, equity analyst at Hargreaves Lansdown.
RISK APPETITIE FALLS
Appetite for risky assets fell further, with the VDAX-NEW volatility index, one of Europe's main barometers of investor anxiety, rising 0.5 percent. The index has surged 29 percent in three sessions. The higher the index, the lower the market's desire to take risk.
The euro hit a 10-week low against the dollar, yen and Swiss franc. The premiums investors demand to hold Spanish and Italian sovereign bonds over German debt hit their highest since the euro's launch as an 85 billion euro deal for Ireland on Sunday failed reassure investors.
"The attempt of European politicians so far is one of trial and error. Poor data in combination with continued concern on the European debt situation could result in a much more severe sell-off," said Koen De Leus, strategist at KBC Securities.
The Thomson Reuters Peripheral Eurozone Countries Index was down 1.3 percent. Britain's FTSE 100, Germany's DAX and France's CAC 40 were flat to up 0.5 percent, while Ireland's ISEQ, Spain's IBEX, Portugal's PSI 20 and Italy's FTSE MIB fell 0.4 to 0.6 percent.
Germany's largest construction group Hochtief rose 3 percent after German markets regulator BaFin gave the go-ahead for Spanish rival ACS's hostile takeover offer. (Editing by Hans Peters)