Argentina default, U.S. rate hike worries hit European shares
* FTSEurofirst 300 falls 1.3 pct, lowest close in 3 months
* Blue-chip Euro STOXX 50 down 1.7 pct, hits 3-month low
* Worries about U.S. policy, Argentina default hit sentiment
* Europe's volatility index surges 9.4 pct to 3-mth high
* Shares in Adidas and Banco Espirito Santo slump
By Atul Prakash
LONDON, July 31 (Reuters) - European shares fell sharply on Thursday, with the euro zone's blue-chip index slipping to a three-month low, on concerns of an earlier than expected interest rate hike in the Uniteed States and a debt default by Argentina.
Spanish stocks came under severe pressure, with Madrid's IBEX dropping 2.1 percent, as traders cited worries over Spanish companies' exposure to Latin America after Argentina defaulted on its debt on Thursday.
Steep falls in some stocks following their earnings reports also hurt sentiment. The broader market sell-off accelerated in the afternoon after the U.S. market opened lower and extended losses later in the session, with the Euro STOXX 50 falling 1.7 percent to its lowest since mid-April. Europe's main volatility index rose 9.4 percent to a three-month high. Continuación...