European shares suffer as trade jitters, weak data weigh

* STOXX 600 down 1.6 pct to 2-week low

* Banks, miners, tech lead sectoral fallers

* Reckitt gains after pulling out of Pfizer race (Adds details, closing prices)

By Helen Reid and Danilo Masoni

LONDON, March 22 (Reuters) - Concerns about trade sent European shares tumbling on Thursday as the United States prepared to announce hefty tariffs on Chinese imports, with banks, basic resources stocks and tech the worst-performing.

U.S. President Donald Trump signed a presidential memorandum that could impose tariffs on up to $60 billion in Chinese imports.

Separately, the European Union secured an exemption from U.S. tariffs on steel and aluminium imports set to come into force on Friday.

The pan-European STOXX 600 index fell 1.6 percent to its lowest level in more than two weeks, while Germany's exporter- and industrials-heavy DAX fell 1.7 percent.

The mood was also dampened by a weaker than forecast business activity survey. Euro zone businesses rounded off the first quarter of 2018 with their slowest growth in over a year, much weaker than expected, as new business took another hit from a stubbornly strong euro.

"Business sentiment has to be monitored carefully in the coming months, especially if trade tensions intensify, because any further significant deterioration in confidence indicators might signal that the balance of risks starts shifting to the downside," said UniCredit head of macro research Marco Valli.

Banks, which have been penalized recently weaker than expected macro economic data in Europe, were among the leading losers on Thursday. Their sectoral index fell 2.5 percent to an 11-month low. The sector also suffered after the U.S. Federal Reserve surprised the market with less hawkish rate guidance.

Deutsche Bank declined 2.9 percent, still weak after sharp losses in the previous session when the bank's finance chief said a strong euro and higher funding costs would have a 450 million euro impact on revenues.

Commerzbank tumbled 6.2 percent after a downgrade from Kepler Cheuvreux.

Basic resources stocks led sectoral losers, down 2.9 percent after copper reversed earlier gains to fall to three-month lows as escalating concern about U.S. plans to levy duties on Chinese imports.

Tech stocks ( .SX8P) 2.1 as tariffs on China were expected to target the high-tech sector.

Chipmakers ams, STMicro, and Infineon , which have led the recent tech stock rally and are firmly embedded in international supply chains, all fell. .

Deal developments and earnings continued to drive European stock moves.

Reckitt Benckiser shares shone, jumping 4.8 percent after the British consumer products firm pulled out of the bidding for Pfizer's consumer health unit.

The move reflected relief in the market that Reckitt would avoid over-levering or issuing shares for the acquisition.

GlaxoSmithKline, now seen as having a better chance of buying the Pfizer business, declined 1.7 percent.

Disappointing 2017 results sent United Internet shares down 9.5 percent. Subsidiary Drillisch fell 5.7 percent.

Also in tech, Ingenico suffered a 3.4 percent loss after Kepler Cheuvreux downgraded it, saying full-year guidance now looked "challenging".

Tech and engineering consultancy Altran fell 3.3 percent after launching a share capital increase of 750 million euros.

The world’s no.2 cement maker Heidelberg Cement fell 2.3 percent after it announced a dividend slightly short of analysts’ average expectations.

Bayer fell 1.4 percent after Australian and EU regulators approved the firm's takeover of Monsanto. "Halfway there," wrote UBS analysts, adding all eyes were now on the U.S. Department of Justice, yet to approve the deal.

Overall, with results season drawing to a close, analysts were becoming more negative on the earnings outlook for European stocks.

(Reporting by Helen Reid and Danilo Masoni, Editing by Richard Balmforth and Hugh Lawson)