European shares fall as UniCredit leads banks lower after tests

* Pan-European STOXX 600 index down 0.6 percent

* Banks led lower by UniCredit (EUREX: DE000A163206.EX - news) , Raiffeisen

* But Italian lender Monte Paschi outperforms

* Heineken (LSE: 0O26.L - news) down after results, Legrand (LSE: 0MW7.L - news) up

By Danilo Masoni

MILAN, Aug 1 (Reuters) - European shares closed lower on Monday, dragged down by banks such as UniCredit and Raiffeisen that performed poorly in a Europe-wide stress tests.

The pan-European STOXX 600 and the FTSEurofirst 300 index both closed 0.6 percent weaker.

The STOXX 600 banking index fell 1.8 percent, reversing earlier gains and giving back a rally seen in the previous days as enthusiasm for the results of the stress test, which delivered little negative surprises, was short-lived.

Austrian bank Raiffeisen, which emerged among the four worst perfomers in the tests along with Monte dei Paschi (Milan: BMPS.MI - news) , Banco Popular and UniCredit, fell 5 percent.

UniCredit slumped 9.4 percent as the poor showing in the tests highlighted the need for Italy's biggest bank by assets to strengthen its capital, while Banco Popular fell 5.9 percent.

"The stress test results confirm the necessity for UniCredit to reinforce its capital position," Banca Akros analyst Luigi Tramontana said in a note. Analysts have said UniCredit needs to raise as much as 9 billion euros.

Monte dei Paschi, however, rose 0.6 percent as some optimism over a last-minute rescue plan offset the Italian lender's bad showing in the tests, where it fared the worst.

Energy shares also lost ground following a sharp decline in crude oil prices. The European sector index dropped 1.8 percent, dragged down by a 2.9 percent and 2 percent fall in Royal Dutch Shell (Xetra: A0ET6Q - news) and BP.

However, Europe's STOXX 600 Basic Resources index, which includes mining stocks, rose 0.2 percent as sluggish manufacturing growth data from China, the world's biggest metals consumer, raised hopes of further economic stimulus.

Among other gainers, Legrand rose 3.8 percent on the back of its well-received results at the French power switch maker, whose sales growth in the first half beat expectations.

But Heineken fell 3.7 percent after the Dutch brewer reported first half revenue below Reuters' estimates, hurt by declining sales in Africa and Eastern Europe. (Additional reporting by Atul Prakash; Editing by Tom Heneghan)