REFILE-European shares fall, end worst quarter since 2002

(Refiles to fix mistyped stock code for Shell in paragraph 20)

By Amanda Cooper

LONDON, March 31 (Reuters) - European shares fell on Monday, securing their worst quarterly performance in more than five years, as renewed concern about the credit crunch hit bank stocks and a broker downgrade dragged down Vodafone (VOD.L: Quote, Profile, Research)

A rise in oil and gas shares helped stem the decline in the broader European equity market, which has now fallen for five months in a row, its worst run since a six-month stretch of declines between April and September 2002.

Banks were the worst performing sector after a Merrill Lynch research note said Switzerland's UBS (UBSN.VX: Quote, Profile, Research), one of the biggest casualties of the credit crunch among Europe's large banks, may see further writedowns.

The FTSEurofirst 300 index of top European shares was down 0.26 percent at 1,262.14 points.

The index has lost more than 20 percent since a 6-1/2 year high last July as the fallout from the credit crunch has gathered pace and raised concern over corporate profitability and the global growth outlook.

"You can break the market down into two components. You've got the credit crunch affecting financials and then you've got the economic slowdown," said Kevin Lilley, a portfolio manager at Royal London Asset Management who helps manage 1.1 billion euros ($1.74 billion).

"We are now five years into this economic cycle and I think people's estimates are way, way too high," he said, adding: "It is difficult to see the market making major headway when there are going to be major downgrades coming through."