Europe shares fall as Goldman note weighs on banks

* FTSEurofirst 300 down 0.7 percent

* Banks broadly weaker on bearish Goldman note

* UBS up after says expects at worst a small quarterly loss

By Sitaraman Shankar

LONDON, July 4 (Reuters) - European shares fell early on Friday, as relief over interest rates quickly evaporated and bearish brokerage comment weighed on banks, though UBS (UBSN.VX: Quote, Profile, Research) gained after saying it expected at worst a small quarterly loss.

At 0826 GMT, the FTSEurofirst 300 index of top European shares was down 0.8 percent at 1,168.86 points. United States markets will be closed for the Independence Day holiday.

Banks were broadly weaker after Goldman Sachs cut its rating on Spain's Santander (SAN.MC: Quote, Profile, Research) to "neutral" from "buy" and took down price targets for Deutsche Bank (DBKGn.DE: Quote, Profile, Research), Commerzbank (CBKG.DE: Quote, Profile, Research) and Deutsche Postbank (DPBGn.DE: Quote, Profile, Research).

Santander ranked among the top negative weights on the index with a 2.5 percent fall, while Deutsche Bank, Commerzbank and Deutsche Postbank fell 1-1.9 percent.