European shares extended falls on Thursday, led by banks, as euro zone sovereign bond yields rose ahead of Spanish and French debt auctions, on worries of further contagion in the currency bloc's debt crisis.

At 8:53 a.m., the FTSEurofirst 300 <.FTEU3> index of top European shares was down 0.7 percent at 963.91 points.

The STOXX Europe 600 Banking Index <.SX7P> fell 1.3 percent.

Yield spreads of Spanish and French 10-year government bonds over German equivalents hit euro-era highs on concerns the euro zone debt crisis is spreading, with debt auctions in France and Spain due shortly.

(Reporting by Brian Gorman)