Europe shares fall early on banks; oils, Danone up

* FTSEurofirst 300 down 0.6 pct

* Banks fall, tracking weakness in U.S. financials

* Danone lifts 2008 margin target; stock rises

* Belgacom sinks after cutting 2008 margin target

By Dominic Lau

LONDON, July 25 (Reuters) - European shares fell early on Friday, tracking steep losses in the U.S. and Asian markets after weak U.S. housing and jobs data raised fresh concerns about the health of financial firms and the global economy.

Banks were the biggest drag on the FTSEurofirst 300 index of top European companies, which was down 0.6 percent at 1,163.45 points by 0758 GMT. The pan-European index lost 1.5 percent on Thursday.

Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz) shed 4.2 percent, Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) dropped 4.3 percent and Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) lost 4.7 percent. UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz) fell 5.7 percent after New York State sued the Swiss bank, accusing it of committing a "multi-billion dollar fraud" by steering broker clients into auction-rate securities that became impossible to sell once the credit market tightened.