European shares extend gains, led by banks

LONDON, Oct 2 (Reuters) - European shares extended gains in early trade on Thursday, as banking stocks rose after the passage of a $700 billion bailout package by the U.S. Senate.

At 0744 GMT, the FTSEurofirst 300 index of top European shares was up 0.8 percent at 1,080.97 points, after rising more than 1 percent.

It closed 0.9 percent higher in the previous session, but is still down about 28 percent so far this year.

Banking stocks were the top weighted gainers on the index, with HBOS rising 10.9 percent, Lloyds TSB advancing 3.8 percent and Fortis gaining 8.2 percent.

Shares in French bank Natixis rose 10 percent on market talk that the company was planning to delist its shares. No immediate comment was available from Natixis.

Switzerland's UBS AG rose 8 percent after the bank said it would make a small profit in the third quarter after a year of losses, signalling it had started to turn the corner even as the credit crisis still engulfed many U.S. and European peers. (Reporting by Atul Prakash)