Rising oil, banking worries hit European stocks

LONDON/FRANKFURT, Aug 21 (Reuters) - European shares fell to their lowest close since Aug. 4 on Thursday, pressured by persistent financial sector worries and a rising oil price, which reignited inflation fears.

Commodity stocks limited losses as miners tracked higher metal prices and heavyweight energy stocks gained from the rise in crude.

The FTSEurofirst 300 .FTEU3 index of top European stocks provisionally ended down 0.86 percent at 1,155.28 points.

HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) was the biggest negative weight on the index, falling 2.8 percent, while Santander (SAN.MC: Quote, Profile, Research, Stock Buzz), Intesa SanPaolo (ISP.MI: Quote, Profile, Research, Stock Buzz), BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) and ING (ING.AS: Quote, Profile, Research, Stock Buzz) fell 2.3-3.7 percent.

Oil CLc1 jumped nearly $6 a barrel to well above $121 on geopolitical tensions, the dollar's slide and concern that Tropical Storm Fay might yet threaten energy infrastructure in the Gulf of Mexico.

BP (BP.L: Quote, Profile, Research, Stock Buzz) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) rose 1.2 percent and 1.8 percent respectively.

"The focus remains on the financial crisis. There is still a lot of uncertainty. The hope for stabilisation gets postponed from quarter to quarter and the overall market can't recover until there is clarity," said David Pieper, analyst at German bank LBBW.

"As long as the financial sector declines....the overall market can't play a different tune." (Reporting by Sitaraman Shankar in London and Eva Kuehnen in Frankfurt)