UPDATE 2-European shares tumble as Turkish turmoil hits banks

Reuters

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    * STOXX down 1.1 percent
    * Banks BBVA, UniCredit down on Turkish worries
    * Profit warning hammers K+S

 (Adds closing prices, chip makers)
    By Danilo Masoni
    MILAN, Aug 10 (Reuters) - European shares fell on Friday as
a dramatic fall in the Turkish lira jolted markets, with banks
such as Spain's BBVA and Italy's UniCredit hit by worries over
their exposure to Turkey.
    The pan-European STOXX 600  .STOXX  index closed down 1.1,
losing 0.9 percent on the week, as investors fretted about the
political and economic repercussions of the Turkish crisis. 
    The Turkish lira fell to record lows as concerns over a
widening rift with the United States persisted after a Turkish
delegation returned from talks in Washington with no apparent
solutions.  urn:newsml:reuters.com:*:nL5N1V10HI    
    "As the talks ... have broken down for the time-being, no
relief is to be expected," BayernLB analyst Norbert Wuthe said.
    "At the same time, the new U.S. sanctions against Russia
have unleashed concern in the German economy," he added.
 urn:newsml:reuters.com:*:nL1N1UZ1M4  urn:newsml:reuters.com:*:nL5N1V06BZ    
    Germany's exporter-heavy DAX  .GDAXI  index fell 2 percent,
underperforming the broader market, while Milan was the
hardest-hit major European index and lost 2.5 percent, its
lowest level since July last year.
    Banks were among the biggest fallers after the Financial
Times reported that the European Central Bank is concerned about
the exposure of some of the euro area's biggest lenders to
Turkey in light of the currency fall.  urn:newsml:reuters.com:*:nL5N1V12A6
    Shares in France's BNP Paribas  BNPP.PA , Italy's UniCredit
 CRDI.MI  and Spain's BBVA  BBVA.MC  fell 3 percent, 4.7 percent
and 5.1 percent respectively. 
    Jefferies analysts said Turkey contributed 14 percent to
BBVA's first-half group profit and 9 percent to UniCredit's
consolidated profit, although their capital exposure is limited.
    Both banks have said a 10 percent fall in the Lira could
shave 2 basis points off their capital adequacy ratio.     
    Elsewhere, a profit warning from K+S  SDFGn.DE  sent shares
in the German potash miner tumbling 7.2 percent, to the bottom
of the STOXX index.  urn:newsml:reuters.com:*:nL5N1V07T9  
    Another big loser was the tech sector  .SX8P , which was
down 1.5 percent with chipmakers at the sharp end of selling.
    STMicro  STM.MI , Siltronic  WAFGn.DE , Infineon  IFXGn.DE 
and AMS  AMS.S  lost 5.1 percent, 6.3 percent, 2.8 percent and
3.9 percent as negative sentiment pervaded semiconductors after
disappointing results from U.S. chipmaker Microchip  MCHP.O , a
bellwether for the industry.     

 (Reporting by Danilo Masoni; Editing by Susan Fenton and
Alexander Smith)
 ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni))

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