European shares hit 4-1/2 mth low on concerns over Iraq
* FTSEurofirst 300 down 1.3 pct, hits 4-1/2 month low
* Afren sinks after suspends output from Kurdistan
* Nokian Renkaat hit by plummeting sales in Russia
* Monte dei Paschi falls after results
PARIS, Aug 8 (Reuters) - European shares dropped on Friday, sinking for the seventh time in eight sessions on mounting geopolitical jitters after U.S. President Barack Obama authorised air strikes in Iraq.
At 0742 GMT, the FTSEurofirst 300 index of top European shares was down 1.3 percent at a 4-1/2 month low of 1,297.93 points. The benchmark index has lost about 7 percent since mid-June.
Obama said on Thursday he had authorised U.S. air strikes to blunt the onslaught of Islamist militants in northern Iraq and began airdrops of supplies to besieged religious minorities to prevent a "potential act of genocide".
"There's just no buyers out there, and indexes keep breaking support levels one after the other," FXCM analyst Vincent Ganne said.
"People have been caught off guard. The geopolitical risks have been treated as 'noise' by investors in the past few months, but now they suddenly realise that it's much more than just 'noise'."
Shares in London-listed oil producer Afren dropped 6.3 percent after the firm said it has suspended output at its Barda Rash oilfield in Iraqi Kurdistan, the first field to shut in Kurdistan as Islamic State militants advance closer to the oil-rich region.
Tensions between the West and Russia were also at the forefront of investors' minds, with shares in Nokian Renkaat dropping 4.9 percent after the Finnish tyre maker reported a second-quarter operating profit below expectations due to plummeting sales in Russia.
European airlines also tumbled, with Air France losing 5.2 percent and Lufthansa down 3.3 percent and IAG down 2.8 percent.
Russian Prime Minister Dmitry Medvedev said on Thursday Moscow was considering banning European and U.S. airlines from flying transit routes through Russian airspace in retaliation for tougher sanctions from Europe and the United States.
According to data from Flightradar24, Lufthansa and Air France-KLM would be hardest hit by a potential closure of the airspace over Siberia.
Also on the downside, shares in Monte dei Paschi di Siena plummeted 8.4 percent after Italy's third biggest bank posted a worse-than-expected loss in the second quarter as charges on souring loans rose, underlining the challenges the bailed-out lender still faces to turn itself around.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Editing by Alison Williams)