UPDATE 1-European shares at lowest levels in nearly two years

* AMS, Atos drag tech sector down

* STOXX, DAX at December 2016 levels

* Earnings fail to offset political worries (Adds shares)

LONDON, Oct 23 (Reuters) - European shares fell to their lowest levels in nearly two years on Tuesday after a disappointing batch of third-quarter results, particularly in the tech sector, amid ongoing worries on Brexit, Italy's budget, Saudi isolation, trade wars, Chinese growth and U.S. interest rates.

The pan-European STOXX 600 was down 1.3 percent at 0838 GMT, its lowest since December 2016, as it headed towards a fifth day of losses after a negative close in Asia and on Wall Street.

Other benchmarks sustained heavy losses: the Paris CAC 40 fell 1.3 percent and Germany's DAX lost 2 percent, also at December 2016 lows.

The Frankfurt bourse's blue chips are down 16.7 percent since their January high and not far from a 20 percent fall, which typically defines a bear market.

"Risk off the table as geopolitical tensions remain," was the message from LCG analyst Jasper Lawler to his clients ahead of the open.

The European tech sector posted the worst performance, down 3.7 percent as chipmaker AMS tumbled and lost 17 percent after its outlook failed to convince investors.

The sector, a key driver of stock markets, is down 18.4 percent since its June peak, also not far from bear market levels.

French IT services company Atos ATOS.PA cut its revenue growth forecast for 2018 on Tuesday, citing disappointing results in Germany and North America and global economic uncertainty.

Also losing were Sweden's Saab, which announced a rights issue, and Finnish ship technology and power plant maker Wartsila, after a lower-than-expected quarterly profit.

Among heavy weights, Germany's Bayer dropped 7 percent after a U.S. judge affirmed a verdict against its Monsanto unit that found Monsanto weed-killers caused a mans terminal cancer. (Reporting by Julien Ponthus; editing by Josephine Mason, Larry King)