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UPDATE 1-European stocks start December with a loss after U.S. tax bill delay

* Sell-off sparked by tax disappointment, volatility rises

* Euro zone PMIs fail to stir stocks out of slide (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)

LONDON, Dec 1 (Reuters) - European stocks wilted after a delay in a vote on tax reform in the U.S. deflated a rally in financials and drove regional benchmarks to start December with a loss.

The leading index of euro zone stocks sank 1 percent, and Germany's DAX fell 1.1 percent in a broad-based sell-off, with all sectors in the red.

A gauge of European investor anxiety measuring volatility on the STOXX 600 climbed the most in three weeks in early deals.

Losses accelerated as the euro hit a peak before a series of euro zone PMI reports, which confirmed strong manufacturing growth but weren't enough to lift stocks.

Britain's FTSE, which has suffered from a strong sterling this week, was relatively unscathed, sliding just 0.2 percent.

Traders pointed to month-end index re-weighting and shifts in positioning to explain the moves, which could be exacerbated by thinner trading volumes.

"Yesterday was a pretty heavy trading day with month-end profit taking as we approach the end of the year. I wouldn't read too much into moves in the next session," said Ameet Patel, analyst at Northern Trust. "Positioning is skewed towards tax reform not happening."

Financials were the biggest weight after the U.S. Senate delayed a vote on a tax reform bill that investors anticipated would help banks.

BNP Paribas, Lloyds, Santander and ING were among the worst-performing lenders.

The high-flying tech sector fell in a sign of investors' anxiety about parts of the market that have seen stellar performance and inflows this year.

Oil and gas stocks slipped, as OPEC's extension of supply cuts continued to boost crude prices.

Healthcare stocks also outperformed. A Morgan Stanley upgrade boosted UCB by 3.3 percent. Novo Nordisk , one of the strategists' pharma favorites, gained 2.8 percent.

British pharma company Indivior also shot up 11.7 percent after the U.S. Food and Drug Administration approved its opioid addiction drug.

French telecom company Altice - whose shares sank 59 percent in November after disappointing results - gained 4.3 percent after the company said it would sell data center and Swiss telecoms businesses to reduce its 50 billion-euro debt .

Dialog Semiconductor also bucked the trend in tech stocks.

Hammered on Thursday by a press report Apple would in-source its power chip design, removing a crucial supplier relationship for the German firm, Dialog recovered on Friday to trade up 2.9 percent.

(Reporting by Helen Reid; Editing by Georgina Prodhan, Larry King)