European shares led lower by banks, as threat of US fine hits Commerzbank
* FTSEurofirst 300 falls 1.3 pct; Euro STOXX 50 down 1.4 pct
* Commerzbank falls 5.3 pct on U.S. settlement fears
* Austrian banks hit by CEE exposure, investor haircut (Updates with closing prices and no other changes to text)
By Alistair Smout
EDINBURGH, July 8 (Reuters) - Banking stocks led European shares lower on Tuesday as German banks became the latest lenders to be negotiating a costly legal settlement with U.S. authorities.
At the close, the pan-European FTSEurofirst 300 index was down 1.3 percent at 1,363.46 points, extending losses in afternoon trade in line with US stocks.
Euro zone banks fell 2.8 percent, the biggest sectoral faller, led lower by Commerzbank.
Shares in the German lender fell 5.6 percent as sources told Reuters that U.S. authorities had begun settlement talks with the bank and its larger rival Deutsche Bank, down 2.1 percent, over their dealings with countries blacklisted by the United States.
The New York Times reported that Commerzbank's settlement was expected to include at least $500 million in penalties. This compares with a settlement of almost $9 billion France's BNP Paribas struck in a similar case earlier this year. Continuación...