European shares hit a fresh five-month low on Monday after losing more than five per cent last week as investors remained jittery about the ability of Greece and Spain to deal with their debt problems and due to concerns about the banking sector.

At 0812 GMT, the FTSEurofirst 300 index of top European shares was down 0.5 per cent at 965.86 points after falling to a low of 964.66, the lowest since December. The index fell more than 5 per cent last week.