GLOBAL MARKETS-Greek debt setback sends shares, euro lower

* Greek debt worries hit U.S. stock futures

* Fears for Europe's banks hurt region's shares

* DuPont revenues miss expectations

By Richard Hubbard

LONDON, Jan 24 (Reuters) - Worries about the implications of the latest setback in efforts to restructure Greek debt hurt the euro and global share markets on Tuesday, overriding fresh data showing Europe's economy may be headed for a weaker slowdown than many had feared.

U.S. stock index futures also fell on the problems with the Greek debt talks, with analysts pointing as well to a short-term top in equity markets after the S&P 500 posted five days of back-to-back gains.

"It's back to worrying about whether Greece is heading for a soft, messy or technical default," Peter Cardillo, chief market economist at Rockwell Global Capital in New York said.

A deal to restructure Greek debt must be agreed before the country can secure the bailout funds it needs to avoid a disorderly default, which could hurt global economic growth and Europe's fragile banking system.

"Greek debt payments are looming and the situation needs to be resolved. We are concerned about financials that still need to raise capital," said Andrea Williams, who manages $2.1 billion in assets for Royal London Asset Management.

In the latest development, euro zone finance ministers rejected an offer by private creditors to write down the nominal value of their debt by 50 percent in return for new longer-term bonds paying an interest rate of 4 percent.

The euro was down about 0.5 percent against the dollar at $1.2960 after a choppy trading session which saw it hit a high of $1.3603, a level not seen since Jan. 4, when fresh economic data pointed to a recovery in the region's economy.

The Markit flash Eurozone Purchasing Managers' Composite Index (PMI), often seen as a growth indicator, jumped to 50.4 from December's 48.3, its highest reading in four months and easily beating the highest forecast of 49.5 in a Reuters poll.

"The index seems to have bottomed out in October and we've had three months of improvement. Three months we see as a turning point signal, and we are beginning to get a bit more confident," said Chris Williamson, chief economist at data provider Markit.

A reading above 50 indicates economic expansion and below this level, a contraction.

"Although we still see downside risks for activity in early 2012, today's report suggests that the EMU (European) economy is not going to fall in a deep recession near-term," Annalisa Piazza, market economist at Newedge said.

DEBT FEARS HIT EUROPE'S BANKS

European share markets however spent the session in negative territory, due mainly to weakness in financial stocks, with the pan-European FTSEurofirst 300 index of top shares off 0.85 percent at around 1,039.40 points.

The STOXX Europe 600 Banks index was nearly 2.0 percent down on worries about further debt writedowns for the sector.

Investor sentiment was also hurt by results from German conglomerate Siemens, a bellwether for Europe's manufacturing industry, which showed a 23 percent decline in its first-quarter core operating profit, missing the most pessimistic analysts' forecasts.

In New York S&P 500 futures were down 7.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures were off 44 points, and Nasdaq 100 futures lost 10 points.

Chemical giant DuPont reported that its quarterly revenue missed Wall Street expectations due to a sharp drop in demand for solar and electronic materials. {ID:nL4E8CO5XE]

Safe-haven German debt prices fell after PMI data also showed Germany's manufacturing sector grew in January for the first time since September, but later climbed as the Greek worries drove up demand.

German government bond futures were about 23 ticks higher on the day at 137.75. Benchmark 10-year German yields were slightly easier at 1.96 percent.

Debt markets are also growing nervous about the outlook for Portugal, the next weakest euro zone member, whose bond yields have been rising steadily over the past week.

The MSCI world equity index was down about 0.5 percent at 314.54 point after another quiet day in Asia where many markets are still closed for the Lunar New Year.

Risks posed by Europe's debt woes had prompted the Bank of Japan to cut its growth forecasts on Tuesday.

In the commodities markets, Brent crude oil slipped to $110 a barrel as investors looked away from the tension between Iran and the West to focus more of the problems stemming from protracted negotiations over Greece's debt.

Spot gold eased down from a six-week high to be around $1,662.90 an ounce as investors await the outcome of a two-day Federal Reserve meeting, which ends on Wednesday, for any signs that interest rates will stay lower for longer, as that could put some pressure on the U.S. dollar.