The top shares fell on Wednesday as a weak Chinese manufacturing survey jangled nerves already raw from a downward revision of U.S. GDP data and the unfolding euro zone debt crisis.

Miners <.FTNMX1770> were out of favour after top consumer China's factory sector shrank the most in 32 months in November as new orders slumped, according to a preliminary PMI survey.

Rio Tinto and BHP Billiton were among the worst affected, down 1.7 percent and 0.9 percent, respectively.

JPMorgan said in a note, however, that while economic fears were driving near-term volatility, it saw medium-term upside for the large-cap miners.

We remain optimistic on the medium to long-term outlook based on generally attractive valuations for those willing to look through near-term fluctuations, and continued strong demand growth for many commodities, the broker said.

The UK benchmark <.FTSE> was down 7.66 points, or 0.2 percent, at 5,199.16 by 0931 GMT, hovering around seven-week lows, having shed 0.3 percent on Tuesday, its seventh straight session of falls.

Banks <.FTNMX8350>, already down 16 percent in November, came under pressure as investors reacted nervously to news that the U.S. Federal Reserve plans to stress test six large U.S. banks against a hypothetical market shock.

The negative news is continuing with the Fed adding another rigid stress test for the U.S. banks which, if they did the same in Europe, would show that the emperor is really wearing very few clothes right now, said Lex van Dam, hedge fund manager at Hampstead Capital, which manages $500 million (320 million pound) of assets.

Market sentiment was also hit as France, Belgium and Luxembourg discussed how to provide temporary state debt guarantees for failed financial group Dexia .

Defensive stocks dominated the FTSE 100 leader board, with Reckitt Benckiser , Centrica , SSE and Imperial Tobacco enjoying gains of 0.5-0.8 percent.

Johnson Matthey , the world's largest supplier of catalytic converters, topped the blue-chip leader board, up 2 percent after beating forecasts with a 24 percent rise in first-half profit, helped by higher average metals prices.

Stefan Angele, head of investment management at Swiss & Global Asset Management, which has around 80 billion Swiss francs of funds under management, highlighted that companies have a certain amount of resilience in the face of a tough economic backdrop.

The corporate sector in general is probably stronger than currently estimated, as many businesses have the flexibility to move wherever it is necessary (while governments don't have this flexibility!), he said.

Currently, we clearly prefer investments into corporate balance sheet(s) -- be it in corporate bonds or high-dividend-paying equities -- to investments in low-yielding (in real terms even negative-yielding) government bonds.

Ex-dividend factors knocked 4.72 points off the FTSE 100 index on Wednesday, with Carnival , HSBC , Man Group and Next all trading without their payout attractions.

(Editing by Will Waterman)