STOXX 600 off 0.3
Barclays drops on lowering net interest margin forecast
Euro zone PMI hits near threeyear low
Hermes jumps on Q3 sales beat

Oct 24 Reuters European shares reversed early gains on Tuesday as a drop in shares of banks and downbeat economic data from the region outweighed support from robust earnings from companies such as luxury giant Hermes.

The panEuropean STOXX 600 index was down 0.3 by 0835 GMT.

Barclays dropped 6.8 after the British lender hinted at major cost cutting later this year and warned competition for savers39; money was eating into its margins.

Shares of rivals Lloyds and NatWest fell 2.5 and 3.3 respectively, dragging Europe39;s banking sector down 1.3.

We are in a situation where banks are going to have to think hard about the cash they set aside for debt. So generally the banking sector is in quite a tough situation at the moment, said Danni Hewson, head of financial analysis at AJ Bell.

Spurring concerns about a recession, data showed the euro zone Composite Purchasing Managers39; Index PMI fell to a near threeyear low in October, while business activity in Germany contracted for a fourth straight month.

We39;re seeing the impact of increased borrowing costs in the fact that business activity in Germany has contracted again, so there39;s a real expectation that a recession is well underway, certainly in that part of the eurozone, said Hewson.

While investors are expecting global central banks to refrain from raising…