* FTSEurofirst 300 down 1.4 percent * Banking stocks down; Volkswagen gains * Commodity stocks lower as metal, crude prices retreat By Joanne Frearson LONDON, June 8 (Reuters) - European shares were lower towards midday on Monday, led by banking stocks as investor sentiment weighed, while commodity stocks fell as metal and crude prices retreated. By 1026 GMT, the pan-European FTSEurofirst 300 .FTEU3 index was down 1.4 percent at 860.20 points. The index has risen for the past three out of four weeks and has gained around 33 percent since hitting a lifetime low in early March. "The market has had a tremendous run so it is not surprising money is being taken off the table. We do not think this is serious, but a correction which is long overdue," said David Buik, partner at BGC Partners. "Yields on U.S. government bonds are also sharply higher which may mean we could be looking at interest rates rises ... so investors could also be cautious over that," he said. Yields on benchmark 10-year U.S. Treasury ticked up slightly on Monday, but have risen by about 23 percent since the beginning of May. The banking sector took the most points off the pan-European index. British bank Barclays (BARC.L) fell 2.2 percent. The bank said it is in talks to sell Barclays Global Investors (BGI), with U.S. fund manager BlackRock the frontrunner to land the asset manager, according to people familiar with the matter. [ID:nL8414031] Lloyds Banking Group (LLOY.L) lost 5.6 percent after it said it had raised just under 3.5 billion pounds ($5.56 billion) from shareholders which it will use to pay back some of the money injected by the British government last year. UBS (UBSN.VX)(UBS.N) slipped 1.8 percent after Swiss newspapers quoted UBS board member Bruno Gehrig as saying the bank was "not out of the woods yet" as it was still seeing outflows of client money. UBS declined to comment. However, Deutsche Postbank (DPBGn.DE) rose 7.4 percent on a report in German business daily Handelsblatt that said Deutsche Bank (DBKGn.DE) has raised its Postbank stake through purchases in the market. Deutsche Bank was down 1.9 percent. COMMODITIES WEIGH AS PRICES RETREAT Energy stocks were another drag on the index as oil fell below $67 a barrel after hitting a seven-month high of $70 last week as the dollar strengthened. BG Group (BG.L), BP (BP.L), Royal Dutch Shell (RDSa.L) and Total (TOTF.PA) lost 0.5-2.3 percent.

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