European shares fell at mid-session on Wednesday as bearish comments by Fitch and strong demand for safe-haven German bonds triggered a sell-off after a recent strong run, which had seen the index touch a five-month high.

David Riley, the head of sovereign ratings for Fitch, said the European Central Bank should ramp up its buying of euro zone debt to prevent a cataclysmic collapse of the euro. While a break-up is not Fitch's baseline scenario, it could happen if Italy did not find a way out of its debt problems, Riley said.

The euro, which has shown a strong correlation to European equities since the 2008 recession, fell close to a 16-month low against the dollar following Riley's comments.

A strong sale of German bonds earlier on Wednesday was read as a sign investors were seeking shelter in safe-haven debt amid concerns over Greece's efforts to secure further aid, sending a bearish signal ahead of Italian and Spanish auctions later this week.

Because the German auction has gone so well, the market is wary that these (Spanish and Italian) auctions may not go so well, Alex Paterson, a trader at Liberum Capital said.

He said the sell-off could have had a technical element to it as it came when the market was at the top of its range.

At 1:10 p.m., the FTSEurofirst 300 <.FTEU3> index of top European shares was 0.6 percent lower at 1020.89 points after touching a high of 1,029.32, the highest since early August, earlier in the day.

The breakout failure of the 1,028 resistance threshold calls for a consolidation move, Nicolas Suiffet, a technical analyst at Trading Central, said.

Look for choppy price action with a bullish bias as long as 1,015 is not penetrated.

Suiffet said a penetration of the 1,028 resistance would open the way to 1,035 and 1,040 targets, levels not seen since early August, while a break below 1,015 would trigger a bearish acceleration towards 1,007 and 998.

Italian banks were unexpected outperformers, with heavyweight UniCredit rebounding 4.4 percent after losing around 80 percent of its share price value in the five sessions following last Wednesday's announcement of a deeply discounted capital increase.

Struggling BP Milano
, which has just appointed a new managing director, rose 7.7 percent.

(Editing by Helen Massy-Beresford)