UPDATE 2-European shares fall as growth worries grip

(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
* Banks lead losses
* Osram rallies, AMS sinks after counter-bid
* Tullow Oil biggest FTSE 250 gainer

(Updates to close)
By Susan Mathew
Aug 12 (Reuters) - European shares fell on Monday, with
banks leading the decline, as worries that the protracted
U.S.-China trade war could push the global economy into
recession sent investors scurrying to safer assets.
Worsening protests in Hong Kong and a collapse in the
Argentine peso added to the downbeat mood around the globe.
MKTS/GLOB
The pan-European STOXX 600 index .STOXX pared early gains
to close 0.3% lower, extending last week's 1.7% loss when
worries over an escalation in trade tensions and Italy's
political turmoil had weighed on sentiment. A Goldman Sachs warning over the weekend that fears of the
already prolonged trade war leading to recession are increasing
and that a trade deal was unlikely before the 2020 U.S.
presidential election, saw investors move to safe havens such as
the Japanese yen, gold and bonds. Germany's Ifo survey echoed the growth concerns with its
measures for current conditions and economic expectations both
having worsened in the third quarter. Last week's dire industrial output data from Germany and the
UK economy's first contraction since 2012 were the latest
evidence of growth pangs in Europe, with German economy's
growth numbers due on Wednesday being the next gauge.
"Every piece of news we're seeing out of Europe in bearish,"
said Jonathan Bell, chief investment officer at Stanhope
Capital, pointing also to the European Central Bank's
disappointing stance at its last meeting.
The dour sentiment recently has seen bond yields dive and
banks take a beating. On Monday, Europe's banking index .SX7P
lost 1.8% to hit an over three-year low.
Spain's lender-heavy main index .IBEX led losses in the
region, down 0.9%, with Credit Suisse saying Spanish banks'
sensitivity to rates and lack of visibility call for adopting a
more cautious stance, adding to the gloom. Another catalyst for markets this week could be the U.S.
Federal Reserve's annual symposium where investors hope to get
some clarity on the future path of interest rates.
On the corporate front, the bidding war for Osram OSRn.DE
ramped up after Swiss-listed sensor specialist AMS AMS.S said
it was ready to pay 10% more than Bain Capital and Carlyle
CG.O .
Osram, which is grappling with weakness in the automotive
industry and a broader economic slowdown, is seen as a potential
supplier for connected and autonomous cars.
Osram shares were up 10.4%, while AMS's 11.8% decline was
the most on STOXX 600.
Britain's Tullow Oil Plc TLW.L jumped as much as 20% after
it announced a major oil discovery in the Orinduik block in
Guyana. Among decliners, miners pushed the basic resources index
.SXPP 0.4% lower as iron ore and copper prices fell.
IRONORE/ MET/L