Europe shares fall sharply for 2nd day on debt woes

European shares fell sharply on Monday for the second consecutive session on worries over euro zone debt problems after Hungary said its debt problems were similar to Greece on Friday, with banks the major losers.

By 0705 GMT, the pan-European FTSEurofirst 300 <.FTEU3> index of top shares was down 1.2 percent at 986.17 points.

Banking stocks extended their falls from the previous session, with the STOXX Europe 600 Banking index <.SX7P> down 1.3 percent. Banco Santander <SAN.MC>, Lloyds Banking Group <LLOY.L> and Barclays <BARC.L> fell 1.5 to 2.6 percent.

"The volatility of last week carries on," said Justin Urquhart Stewart, director at Seven Investment Management. "Hungary and its debt situation is adding to the nerves in the market following the U.S. jobs data on Friday."

Commodity stocks were under pressure, with crude <CLc1> falling below $70 a barrel and metal prices lower on growth demand concerns. Rio Tinto <RIO.L> was down 3.5 percent, though BP <BP.L> gained 1.5 percent, continuing its rebound from the previous session. (Reporting by Joanne Frearson)