Banks pull European shares lower

Shares worldwide are still significantly higher from the start of the year

European shares have dropped, led by renewed pessimism over the state of the banking sector.

The UK's FTSE 100 share index briefly fell below the 5,000 level, while Germany's Dax index and France's Cac 40 were also down by about 1%.

The UK announced it was putting more money into Royal Bank of Scotland and Lloyds Banking Group, while Swiss bank UBS reported another quarterly loss.

Investors are worried recent signs of of a recovery may have been premature.

The European Commission also said, following stress tests of major European banks, that losses in the sector could reach 400bn euros ($591bn; £360bn) this year.

London's FTSE 100 dropped 1.1%, or 55 points, to 5,049.33.

Shares in RBS dropped 6.4%, pulling other UK bank shares lower.

UBS, Deutsche Bank, Societe Generale and other major European banking shares also declined.

Germany's Dax index was down 0.8% to 5,386, while leading French stocks declined 0.9% to 3,606.3.

Asian markets also closed lower earlier in the day.