European shares were down on Thursday, set to fall for a third consecutive session, as banking stocks weighed, while food producers also fell after Danone (DANO.PA) cut its sales growth target.

By 1101 GMT, the pan-European FTSEurofirst 300 .FTEU3 index was down 0.3 percent at 1,024.29 points. The index, which is up 23 percent in 2009, has surged 59 percent since reaching a record low in early March.

Banks took most points off the index, with HSBC (HSBA.L), Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE) and UBS (UBSN.VX) down 0.5 to 0.9 percent.

Sensibility is returning to the market. It's no longer about looking for the positive side of the news, but rather taking a step back and being a bit more critical, said Heinz-Gerd Sonnenschein, equity strategist at Postbank.

The sentiment is not remarkably positive today, also due to slight losses on Wall Street yesterday.

Food producers also weighed. Danone fell 4.9 percent after the company said it expected medium-term like-for-like annual sales growth of at least 5 percent, compared with a previous forecast of 8 to 10 percent.

Across Europe, the FTSE 100 .FTSE index was down 0.1 percent, Germany's DAX .GDAXI was 0.3 percent lower and France's CAC 40.FCHI was down 0.5 percent.

MINERS DROP

Miners were the top sectoral decliner on lower metal prices. Anglo American (AAL.L), Antofagasta (ANTO.L), BHP Billiton (BLT.L), Rio Tinto (RIO.L) and Xstrata (XTA.L) fell 1.3 to 4.1 percent.

We are seeing the rundown towards ... the holidays. I get the impression now there are an awful lot of people beginning to close their books and start minimizing risk before the holiday period, said Justin Urquhart Stewart, director at Seven Investment Management.

Volumes are coming down, that may mean if we get any serious news, we could get a bit of volatility coming through.

On the upside, world No. 2 brewer SABMiller (SAB.L) rose 5.2 percent after the company said it expected a second-half boost from a fall in the cost of inputs such as barley and favourable currency movements, beating forecasts with a 6 percent rise in first-half earnings.

BG Group (BG.L), too, rose 1.1 percent after the gas producer announced record productivity from well tests on the Iracema appraisal well, offshore Brazil.

The Santos Basin continues as an excellent source of positive news flow for BG, analysts at Seymour Pierce said.

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