European shares fall as oil, banks weigh
* FTSEurofirst 300 falls 1.1 percent; banks, oils weigh
* Barclays extends falls after Abu Dhabi stake sale
* Euro zone services PMI hits seven-month high
LONDON, JUNE 3 (Reuters) - European equities fell in midday trade on Wednesday, with bank shares extending their slide, and oil producers and commodity stocks also declining. At 1032 GMT, the pan-European FTSEurofirst 300 .FTEU3 was down 1.1 percent at 876.61. It finished flat on Tuesday, after hitting an intra-day peak of 888.94, its highest level since January. The index has risen 35.8 percent since hitting a lifetime low for the year on March 9.
Around Europe, Britain's FTSE 100 index .FTSE was down 1.9 percent, Germany's DAX .GDAXI was down 0.6 percent and France's CAC 40 .FCHI was down 1.2 percent.
Barclays (BARC.L) dropped 5.3 percent, extending Tuesday's 13.5 percent slide, after Abu Dhabi sold an 11 percent stake in the bank, making a $2.5 billion profit and raising fears more investors may cash in on a recent rally in bank shares.
HSBC, (HSBA.L) Societe Generale (SOGN.PA) and Deutsche Bank (DBKGn.DE) fell between 1.6. and 3.6 percent.
"We've had a good run," said Bernard McAlinden, an investment strategist at NCB Stockbrokers in Dublin. "The banks have been underperforming for the last couple of days, but that's a supply of stock issue, rather then any revelations about credit quality, so it's not as serious."
Commodity shares also declined as investors took profits from their recent sharp gains on the back of firmer crude oil CLc1 and metals prices, traders said.
BP (BP.L) slipped 1.7 percent, Royal Dutch Shell (RDSa.L) was down 1.2 percent, and Cairn Energy (CNE.L) fell 4.3 percent. Miners also fell, with BHP Billiton, (BLT.L) Rio Tinto (RIO.L) and Xstrata (XTA.L) shedding between 1.7 and 4.8 percent.
Shares in Germany's second-largest steelmaker Salzgitter (SZGG.DE) fell 4.8 percent after UBS downgraded the company to "sell" from "neutral".
The rate of contraction in the euro zone's dominant service sector eased further in May, climbing to a seven-month high, and business' expectations rose to a 15-month high, surveys showed. [ID:nL3464877]
But the news failed to reverse the market's downward trend.
"The sudden change of mood within two months appears a little overdone, raising the possibility of a consolidation in the short term," Philipp Baertschi, chief strategist at Sarasin, said in a note.
The markets were also waiting for U.S. data -- ADP employment figures, USADP=ECI which show private-sector job losses, at 1215 GMT and April factory orders at 1400 GMT. USFORD=ECI Continued...
