* FTSEurofirst 300 index falls 2 pct
* Banks reverse early gains
* Commodities fall on global growth worries
By Joanne Frearson
LONDON, Aug 3(Reuters) - European shares fell on Wednesday for a fourth consecutive session, to a fresh 11-month closing low, on global growth concerns after U.S. service sector data disappointed, and on worries the euro zone debt crisis could be spreading to Italy.
The decline was extended after U.S. service sector growth was revealed to have dropped unexpectedly in July, intensifying concern the global economy is slowing down.
Compounding this were worries the debt crisis could be engulfing Italy, the euro zone's third-largest economy, as bond yields remained above 6 percent, a level seen as unsustainable.
The STOXX Europe 600 Banks index reversed earlier gains to end 2.2 percent lower and feature among the worst performers.
It has fallen 11.2 percent, since a second bailout for Greece was agreed last month, on concerns about debt contagion in the region and slowing global growth.
"Italy has too much debt and, if bond yields remain at 6 percent, the country could struggle to pay it back," Louise Cooper, a market analyst at BGC Partners, said.
She added global economies were slowing down and heavily indebted countries such as Italy would find it tough to grow.
Earnings news hit Societe Generale , which dropped 9 percent in volume triple its 90-day daily average after results missed forecasts, hindered by its exposure to Greece.
"Investors are worried about the extent of losses the banks will have to take on their sovereign debt exposure," said Richard Batty, global investment strategist at Standard Life Investments, which has 157 billion pounds ($258 million) of assets under management.
The pan-European FTSEurofirst 300 index of top shares closed down 2 percent at 1,027.52 points -- its biggest percentage drop since March -- in volume running at 150 percent of its 90-day daily average.
The index, however, briefly pared losses after the U.S. private employers' report, seen as a precursor to Friday's U.S. non-farm payroll data, topped forecasts.
Italy's benchmark equities index, the FTSE MIB , fell 1.5 percent and is the first of the major European indexes to slip into bear market territory, having dropped 27 percent since a peak in mid-February.
Commodities featured among the worst performers on the worries about global growth, with the STOXX Europe 600 Basic Resources index and the STOXX Europe 600 Oil & Gas index down 3.2 percent.
Cairn Energy dropped 5.1 percent after saying it failed to find oil off Greenland.
($1 = 0.609 British Pounds)
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