European shares slip back to 2016 levels as Wall St support evaporates

* STOXX 600 down 1.75 pct, set for worst year since 2008

* All sectors, national indexes down on the day

* Italian banks fall as Carige cash call blocked

* Euro zone volatility index hits 10-month highs (Adds closing prices, quote)

By Danilo Masoni and Julien Ponthus

MILAN, Dec (Shanghai: 600875.SS - news) 27 (Reuters) - European shares fell on Thursday as the impact of a record bounce on Wall Street proved short-lived amid persistent worries about a slowing global economy and a trade spat between Washington and Beijing.

The pan-European STOXX 600 index fell 1.75 percent to its lowest level since November 2016. It had risen as much as 0.5 percent in early trading but fell back into negative territory after about an hour.

By the close in Europe, the Dow Jones Industrial Average had given up over a quarter of its more than 1,000-point gain of the previous session, after data showed consumer confidence in December fell to its lowest level since July.

"There is little visibility," said Oddo Securities trader Mikael Jacoby, citing the recent negative newsflow and weak data.

"To call for a bottom, we need at least a couple of days of strength, not just in price, but also in trading volume, breadth of the market, and a fundamentally supported environment," also said FXTM strategist Hussein Sayed.

"So far we don't see a shift in fundamentals. Trade tensions between the U.S. and China remains the biggest unknown factor for 2019," he added.

Data earlier showed earnings at China's industrial firms in November dropped for the first time in nearly three years, pointing to a further loss of economic momentum.

All sectors and national indexes in Europe were in the red, with thin holiday volumes helping to make trading more volatile.

The euro zone's volatility gauge was up to its highest levels since markets sustained a correction last February.

The STOXX 600 benchmark remains set for its worst year since 2008, having fallen 15.3 percent in the year to date.

Germany's DAX index, whose big exposure to China has made it particularly vulnerable to trade jitters, is down 19.6 percent this year, while Italy's FTSE MIB, weighed down by concerns over the country's public finances, is down 17.3 percent. The Brexit-hit FTSE is down 14.5 percent.

Italian banks fell 1.13 percent, coming under fresh pressure after the top shareholder at Banca Carige (Dusseldorf: -BJ51.DU - news) put the troubled lender's future into question by blocking a 400 million euro ($456 million) new share issue.

Elsewhere, shares in Vinci (LSE: 0NQM.L - news) rose 0.2 percent after the French construction group said it was buying a majority stake in London's Gatwick airport for about 2.9 billion pounds ($3.7 billion). Its shares pared gains to trade up 0.3 percent.

Among smaller companies. Earthport (Frankfurt: EAPA.F - news) more than trebled its value, jumping 279 percent after Visa (Xetra: A0NC7B - news) said it would pay 198 million pounds to buy the British payments firm.

($1 = 0.8778 euros)

($1 = 0.7915 pounds) (Reporting by Danilo Masoni; Editing by Mark Potter and Hugh Lawson (Frankfurt: 502337 - news) )