Europe shares pare gains after touching 13-mth high

* FTSEurofirst 300 index up 0.9 pct

* Banks the major gainers

* Daimler up on stake talk

By Joanne Frearson

LONDON, Nov 16 (Reuters) - European shares pared gains after briefly touching a 13-month high in early afternoon trade on Monday, after the New York Federal manufacturing index fell in November, although U.S. retail sales rose faster than expected.

By 1407 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was up 0.9 percent at 1,028.54 points, after hitting a 13-month high of 1,031.41.

Banks were the biggest risers on the index. HSBC (HSBA.L), Banco Santander (SAN.MC), Credit Suisse (CSGN.VX) and UBS (UBSN.VX) were up 1 to 2.4 percent.

"From hearing the announcements I thought they were neither bad nor that good," said Howard Wheeldon, strategist at BGC Partners.

"I do not comprehend why there are such high levels of euphoria out there, we are moving forward, but are we moving forward into a sustainable progression?"

The New York Federal Reserve said in a report that manufacturing in New York State fell in November, suggesting factory activity moderating for the first time in four months.

Sales at U.S. retailers rose more than expected in October as consumers bought more motor vehicles and other goods, but the previous month's figures were revised sharply downward, a government report showed. Daimler (DAIGn.DE) was up 4.3 percent after the UAE's Aabar Investments AABAR.AD Chairman Khadem al-Qubaisi said the company was considering increasing its stake in the German carmaker. (Reporting by Joanne Frearson; Editing by Hans Peters)