PARIS, June 24 (Reuters) - European stocks are set to drop on Monday, adding to last week's sharp losses, as investors fretted about the prospect of reduced U.S. monetary stimulus and brewing worries over China's banking sector. At 0622 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were down 0.1-0.8 percent. Chinese shares tumbled on Monday, with the Shanghai Composite down 4.7 percent, after official news reports over the weekend suggested Beijing will not change its tightening policy as it looks to crack down on shadow banking, blamed for a cash crunch on the mainland. "Investors are worrying that the tensions in China's banking sector could aggravate the country's slowdown in growth, right when the Fed is talking about trimming its QE and people cut exposure to emerging markets," a Paris-based trader said. "This looks like the perfect storm, although Chinese authorities could probably quickly ease the tensions." China's overnight repo rate, a key gauge of liquidity in the country's interbank market, was down by 193 basis points to 7.32 percent on a weighted-average basis on Monday morning, retreating from a peak of 11.74 percent last Thursday. Europe's telecom sector will be in the spotlight on Monday, after Vodafone agreed with Kabel Deutschland to buy the German cable operator for 7.7 billion euros. The banking sector will also be in focus, after European officials over the weekend failed to agree on how to share the cost of bank collapses, as Germany resisted attempts by France to water down rules designed to spare taxpayers in future crises. European shares fell on Friday in heavy trade, with the FTSEurofirst 300 index turning negative on the year for the first time in 2013, as the prospect of reduced U.S. monetary stimulus hit markets worldwide. "This mere suggestion of stimulus withdrawal has shown how fragile the current stock market rally has been and it could be some time before markets settle down to where they should be as investors start become more discerning about company fundamentals," Michael Hewson, senior market analyst at CMC Markets, wrote in a note. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0626 GMT: LAST PCT CHG NET CHG S&P 500 1,592.43 0.27 % 4.24 NIKKEI 13,062.78 -1.26 % -167.35 MSCI ASIA EX-JP 482.90 -1.87 % -9.22 EUR/USD 1.3094 -0.21 % -0.0028 USD/JPY 98.47 0.59 % 0.5800 10-YR US TSY YLD 2.606 -- 0.06 10-YR BUND YLD 1.773 -- 0.04 SPOT GOLD $1,281.56 -1.17 % -$15.19 US CRUDE $93.27 -0.45 % -0.42 > GLOBAL MARKETS-Asia shares slide on China worries, Fed outlook > US STOCKS-Wall Street ends slightly up but slumps for the week > Nikkei surrenders early gains, hurt by China worries > FOREX-Dollar rises as Fed exit plan sends Treasury yields soaring > PRECIOUS-Gold falls on stronger dollar, physical demand muted > METALS-Copper falls for 5th day in six on China woes, dollar > Brent dips below $101 on demand worries, firmer dollar COMPANY NEWS: KABEL DEUTSCHLAND VODAFONE Europe's telecom sector will be in the spotlight on Monday after Vodafone agreed with Kabel Deutschland to buy the German cable operator for 7.7 billion euros. SANOFI An improved version of Sanofi's blockbuster insulin Lantus is better than the older drug at controlling blood sugar lows at night, a common side effect in diabetics treated with insulin, according two late-stage tests published on Saturday. SWISS RE The world's second-largest reinsurer confirmed its 2011-2015 financial targets and said it wanted to reduce debt levels by 2016 and focus on dividend growth. FIAT The carmaker has renewed a three-year, 2 billion-euro ($2.64 billion) revolving credit line, it said on Friday, a vital step in its plan to acquire the Chrysler shares it does not already own. BANCA POPOLARE DI MILANO Shareholders of the mid-sized cooperative lender approved on Saturday a rights issue for up to 500 million euros and named Giuseppe Coppini as supervisory board chairman, the company said in a statement. ENEL Enel is waiting for better market conditions to issue a bond and is ready to sell more assets to Gazprom, CEO Fulvio Conti told Milano Finanza on Saturday. BASF Germany is looking favourably on a no-cash transaction that will hand Gazprom full control of its partner BASF's gas trading and storage activities in exchange for BASF taking more equity in Siberian gas fields. RWE, E.ON Credit rating agency Moody's late on Friday downgraded RWE's ratings to Baa1, giving the utility a stable outlook. Moody's affirmed E.ON's A3/Prime-2 ratings and changed its outlook to negative.