Europe shares extend losses, dragged down by banks

LONDON, May 13 (Reuters) - European shares extended losses on Tuesday as banks were weighed down by a writedown-related rights issue at Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz), high UK inflation and further signs of weakness in UK housing markets.

By 0949 GMT, the FTSEurofirst 300 index of leading European shares was around session lows, down 0.7 percent at 1,336.80 points . The banking sector was the biggest negative weight, taking a net 2.7 points off the index.

Credit Agricole fell as much as 7.1 percent to a 1-1/2 month low after saying it planned a capital increase because of further writedowns at its Calyon investment banking unit.

Brtiain's FTSE 100 .FTSE underperformed both the French and German markets, falling as much as 1.3 percent after data showed UK inflation jumped to 3 percent in April, which dampened expectations of near-term interest rate cuts.

A fall in a UK housing measure to its weakest in at least three decades also weighed on British financial stocks.

(Reporting by Toni Vorobyova)