European shares cut some losses after Chicago PMI

LONDON, March 31 (Reuters) - European shares pared some losses after U.S. data on Monday showed business activity in the auto-intensive Midwest region picked up by more than expected, soothing some of the concern over the U.S. economic outlook.

Oil and gas shares offset some of the decline in the broader market as BP (BP.L) and Royal Dutch Shell (RDSa.AS) both rose by more than 1 percent, while on the downside Vodafone (VOD.L) was the largest-weighted drag, falling 3.5 percent after a broker downgrade.

The Chicago Purchasing Management Index rose to 48.2 in March, frmo 44.5 in February, beating forecasts for a rise to 46.0. Various sub-components of the index including new orders and employment also rose.

By 1351 GMT the FTSEurofirst 300 index .FTEU3 of top European shares was down just 0.3 percent at 1,262.28 points, having recovered from losses of up to 1.95 percent earlier.

U.S. benchmark indexes .DJI .SPX .IXIC were last up between 0.1 and 0.6 percent. (Reporting by Amanda Cooper)