Europe shares slip; caution persists ahead of data

LONDON, Sept 28 Tue Sep 28, 2010 3:07am EDT

LONDON, Sept 28 (Reuters) - European shares edged down in early trade on Tuesday, with some caution lingering ahead of the release of key economic data, including U.S. consumer confidence, which is expected to reflect the pace of recovery.

Worries over the debt situation in peripheral euro zone countries also weighed on sentiment. S&P said Ireland's cost of Anglo Irish bank recapitalisation could exceed 35 billion euros and trigger further rating downgrades. [ID:nWLA3971]

By 0705 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares shed 0.5 percent at 1,068.38 points, adding to falls from the previous session.

Among the top decliners, French tyre maker Michelin (MICP.PA) lost 8.5 percent after it unveiled a 1.2 billion euro capital increase. [ID:nLDE68R05D]

"Markets look a bit tired and are looking to economic data to help them break higher. There are tentative signs that the rate of slowing in the global economy is running its course but markets are still nervous about that," said Bernard McAlinden investment strategist at NCB Stockbrokers.

September's U.S. consumer confidence figures, which makes up two-thirds of economic activity, are due at 1400 GMT. In Germany, the forward-looking GfK consumer sentiment indicator showed German consumer morale is likely to rise going into October to its highest level since May 2008. [ID:nBZNRKE612] (Reporting by Harpreet Bhal)