Portuguese stocks slump, lead European bourses down
* FTSEurofirst 300 index falls 1 percent
* Portugal's PSI share index down 4 percent
* European banking index slips
By Atul Prakash
LONDON, July 10 (Reuters) - Investors across Europe trimmed their exposure to banks on Thursday in response to concerns about the health of Portugal's biggest listed bank.
Portugal's PSI share index fell 4.1 percent to a nine-month low, lagging all other European benchmarks after shares and bonds of Espirito Santo Financial Group, the chief shareholder in Banco Espirito Santo, were suspended over "material difficulties" at its parent firm ESI.
Trading in Banco Espirito Santo was also later halted after a 19 percent drop. The broader pan-European FTSEurofirst 300 index hit a two-month low and provisionally closed 0.95 percent lower at 1,350.56 points, taking its losses since early this month to about 4 percent.
The STOXX Europe 600 Banking Index dropped 1.3 percent to a seven-month low.
"The risk of contagion is clearly visible in the markets today as the market fears that there is more to come," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels. Continuación...