(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details) Updates prices)
* FTSEurofirst 300 index falls 1.7 percent
* Mining companies, banks lead declines
* Commerzbank sharply down after profit slump
By Atul Prakash and Danilo Masoni
LONDON/MILAN, May 3 (Reuters) - European shares fell to a three-week low on Tuesday, with Commerzbank leading the decline after a slump in profits and mining stocks falling along with metals prices.
Germany's Commerzbank fell 9.6 percent after posting a 52 percent drop in first-quarter net profit, hit by volatile capital markets and low interest rates.
"The numbers for the first quarter did not come in well ... However, external factors that have also hit other banks hard appear to be the main reason for that," said Landesbank Baden-Wuerttemberg analyst Ingo Frommen in a note.
Traders said media reports about Commerzbank's role in a tax-evasion scheme also weighed on the stock. Commerzbank said its internal systems made sure that all trades were consistent with German law.
Europe's biggest bank, HSBC, which initially gained after it reported a smaller-than-expected drop in profit, gave up its gains and ended down 1.6 percent.
The STOXX Europe banking index fell 3.7 percent and the basic resources index lost 6.4 percent. Prices of major industrial metals fell after a survey released on Tuesday showed Chinese manufacturing activity shrank for a 14th straight month in April.
"I would be cautious on the mining sector because if global growth disappoints again, then commodities could also certainly be prone to disappointments," said Gerhard Schwarz, head of equity strategy at Baader Bank in Munich.
"The dollar is going softer and there are some concerns that the currency is no longer a tailwind for some companies. The results season is not bad overall so far, but I would doubt that the earnings outlook will really improve that significantly as expected. The impact from pricing power is still rather weak."
German chipmaker Infineon fell 4.7 percent after lowering its revenue and profit margin guidance for the full year, saying it expected to benefit less from exchange rates.
According to StarMine data, 44 percent of European companies have announced results so far, of which 61 percent have met or beaten forecasts. But first-quarter earnings are set to fall 18 percent from the corresponding period of 2015.
The pan-European FTSEurofirst 300 index fell 1.7 percent at 1,318.9 points, its lowest closing since April 12.
Solvay rose 4.3 percent, leading gains on the FTSEurofirst, after reporting better-than-expected first-quarter results, as cost cuts offset price reductions.
French bank BNP Paribas outperformed other banks after reporting net income rose 10.1 percent in the first quarter. Lower provisions for bad loans helped offset a slump in its corporate and institutional business.
Today's European research round-up
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Mike Dolan, Markets Editor EMEA.
Editing by Larry King