Financials lead European shares down on yield worries
* FTSEurofirst 300 down 1.1 pct at 1,161.37
* QE tapering worries heightens volatility
* Financials fall on rising yield worries
* RBS stumbles as CEO Hester steps down
LONDON, June 13 (Reuters) - Financial sector companies pulled European stock markets lower on Thursday, dominated by worries over the impact and possible scaling back of central bank support for the economy, while UK lender RBS suffered from the departure of its chief executive.
Financials such as insurers, asset managers and banks led the FTSEurofirst 300 down 13.42 points, or 1.1 percent at 1,161.37, by 1027 GMT.
The FTSEurofirst 300 has fallen nearly 8 percent since mid-May - having rallied as much as 32 percent since last June - hurt by the growing conviction that the U.S. Federal Reserve will rein in its monthly flood of cheap money this year.
The threat of higher bond yields particularly in emerging economies, a likely result of central banks scaling back their stimulus measures, continues to weigh on financials given their exposure to bond markets.
Aberdeen Asset Management fell 4 percent.
"Given the present economic conditions (policymakers) felt uneasy with the financial asset inflation, so they have put attention on the possibility that they might diminish quantitative easing (QE)," Ronald Doeswijk, chief strategist at Robecco, said.
"From here on I expect they will send signals that it is still a mixed picture and they are still neutral (on QE) and that could relax financial markets," Doeswijk said, adding weak economic data and the lack of inflationary pressure should prevent the U.S. from withdrawing before the year-end.
U.S. data including retails sales and weekly jobs figures are due out at 1230 GMT. Any signs of strength from the economy would add to the case for an early withdrawal of the stimulus that had kept markets so buoyant over the past year.
Royal Bank of Scotland RBS.L fell 5.8 percent after the bank surprised investors late on Wednesday by announcing Chief Executive Stephen Hester was stepping down.
"This announcement increases the uncertainty around the shares and potentially delays further any return of the bank to private ownership," Gary Greenwood, analyst at Shore Capital, says while cutting his rating on RBS to "sell" from "hold".
Worries over political stability in Greece, as workers began a nationwide strike in protest against the "sudden death" of state broadcaster ERT, did little to settle investors' nerves and raised concerns over the outlook the euro zone.
Peel Hunt's equity strategist Ian Williams, however, said the concerns over when stimulus withdrawal will occur in the United States remained the key focus for investors.
"Low volumes and high volatility will remain the order of the day at least until next week's FOMC (Federal Open Market Committee) meeting, with technical considerations set to dominate," he said.
The Euro STOXX 50 Volatility index, known as the VSTOXX, surged as much as 9.9 percent to a 3-1/2 month high.
The FTSEurofirst 300 has crashed through the 61.8 percent Fibonacci retracement of the rally that began in mid-April and topped out in mid-May, with support at the 200-day moving average around 1,155, which it tested earlier.