* FTSEurofirst 300 index down 0.4 percent
* Banks fall after Morgan Stanley, Wells Fargo earnings
* GlaxoSmithKline gains after results
By Joanne Frearson
LONDON, July 22 (Reuters) - European shares were down in afternoon trade on Wednesday, with banks leading the decline after quarterly results from U.S. banks Morgan Stanley and Wells Fargo disappointed investors.
By 1306 GMT, the pan-European FTSEurofirst 300 index of top shares was down 0.4 percent at 884.79 points after trading between 879.97 and 888.23 points.
"Morgan Stanley's operating loss per share looks on the high side, compared to others in the sector. I think Morgan Stanley's paying back public aid has distorted results; it is not known if this has been incorporated into analysts' expectations of the results," said Heino Ruland, strategist at Ruland Research.
Bank shares took the most off the index after Morgan Stanley reported its third consecutive quarterly loss and Wells Fargo reported rising credit losses.
"The continuing decline in asset quality is a worry, and whilst they are making money in other areas it just goes to show that conditions in the consumer segment are still evidencing headwinds," said Paul Chesterton, senior sales trader at CMC Markets.
Barclays, BNP Paribas, UBS and Lloyds Banking Group were down 1.5-3.8 percent.
Miners were also heading lower. BHP Billiton fell 2.8 percent after the world's largest miner reported a 10 percent fall in iron ore output to 27.048 million tonnes after its operations were hit by mining fatalities and flooding in Australia.
Energy stocks were down as crude slipped 1.5 percent. BP, Royal Dutch Shell, Premier Oil and Total were 0.8-2.8 percent weaker.
On the upside, drug makers added most points to the index. GlaxoSmithKline gained 0.3 percent after it beat expectations with its second-quarter earnings and said momentum in the second half would pick up on the back of flu vaccine sales.
Across Europe, the FTSE 100 index was down 0.3 percent, Germany's DAX was down 0.4 percent, and France's CAC 40 was down 0.8 percent. (Reporting by Joanne Frearson, editing by Will Waterman)